Capitalisation of interest to asset if interest is waived

AS 124 views 1 replies

A loan was taken for construction of an asset and interest was capitalized till the date of completion of construction. Subsequently, if the whole of the interest is waived, does the capitalized interest need to be reversed?

In a different situation, if the interest is paid by a third party (government), does the interest need to be capitalized? I suppose not.

Thank you.

Replies (1)
As per as 16 interest on loan taken to be capitalized to asset
The interest is calculated up to the completion of asset.
If after capitalization if the total interest is waived then we have to reduce the capitalized asset.


I'm not sure but in my opinion it will be right.


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