Cost of Purchase of asset

To be frank, deferred payments are accruals during putchases and not capitalosed. Depreciation is allowed but not the whole ppe. 

Please correct my understanding if wrong

Interest borrowed for acquisition of asset is capitalized .( Capitalized - before asset put to use)

 Interest on deferred payment for acquisition of capital asset -allowed as an expense  (Expensed- after Asset put to use)

 

Deferred payment means delayed payment of interest to the bank right? Dont do that many times cause you could be facing hard capital rationing. Anyways, as long as there is no halt, you can capitalise it even if it is deferred.

That is correct by you @ sabyasachi if the company borrows 100 for project and worked for 6 months

proprty 90

building 80

leaese30

capitalised interest 100*10%*6/12= 5 

total ppe/assets=205