Borrowing cost

this is the wrong treatment.

three months interest should be debit in the profit and loss account

Sirs,

I beg to differ with the above view.

The interest incurred till the date of capitalisation including that on Machinary has to be capitalised.

The logic behind is the machinary alone cannot generate any revenue .

The guide line in AS also says" the costs incurred in bringing the asset into the present location to its working condition for its intended use"should be capitalised.

So in my view the interest on Machinary should not be looked in isolation,but should be looked with the other facilities.

kkm