Dear Sir,
We have taken the Term loan from bank in Nov-2011 for poultry farm. Poultry farm has fully completed in Dec-2012. This term loan has fully utilised for construction of sheds, machinery and purchase of birds,feed ony. In this period banker has debited the interest to my account. This interest (Nov-2011 to Dec-2012) i have capitalised to assets (Sheds & Machinery) Proportionately and remaining (Jan-2012-Mar-2013) interest debited to P&L Account.
Now my doubt is
1. This interest has to capitalise to asset or not ?
2. If interest capitalise to asset then depreciation will allowed or not ?