I had decided to put up a factory. I had purchased a land for that and constructed a building. In addition i was able to purchase 50% of my plant and machinery . These costs were my own funds.
Since i ran short of own funds, i borrowed money to finance the rest of plant and machinery. I am paying interest and other charges on such borrowing costs and capitalising it,
Note:
1)Activities are in the factory cannot be carried out unless the entire machinery is installed.
2) I cannot use the land, bldg and 50% p&m unless the other part of 50% P&M is installed.
Can my qualifying asset include the land and building and 50% of my plant and machinery purchased out of own funds? Or should the qualyfying asset (on which i can capitalise my borrowing cost) consist of only the 50% of the P&M that i purchased out of Borrowed funds.
Please clarify..
CAclubindia
