MCQ (ICAI NEW STUDY MATERIAL PG NO 5.127, 4TH QUESTION)
If the amount eligible for capitalisation in case of inventory as per AS 16 is Rs 12,000 and cost of inventory is Rs 40,000 and its net realizable value is Rs 45,000; What amount can be capitalised as a part of inventory cost.
(a) Rs 12,000.
(b) Rs 5,000.
(c) Rs 7,000.
(d)Rs 10,000.
12,000 must be capitalised as per borrowing costs standard. Rest all expenses are included into cost of inventory and not capitalised
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