As per AS 16 Borrowing cost incurred on qualifying asset need to be capitalised in the year in which it is ready to give economic benefits to the company . However if qualifying asset takes more the one year to construct. Then what should be the treatment of the interest relating to the qualifying asset which is expensed during the previous year ?
All such expenses should go into capital work in progress A/C which will then be transferred to asset A/C
KK & Company Chartered Accountant
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Chirag P Shah & Co. Chartered Accountant
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