Interest Capitalisation for under constructed building

Dear All,

There is a commercial building consisting of 10 floors of which first 4 floors have been constructed and ready to use/sale.

The client has taken a loan for the said assets.

My question is, whether interest on said loan should be capitalized in full or there should be a segregation as regard to the completed floors. whether completed floors should be regarded as Independent assets? 

If it is so then the interest should not be capitalised in full and only for remaining 6 floors should be capitalised As per As-16 read all together with As-10.

Comments awaited....

Replies (1)

Loan has been obtained to construct the whole building and not in tranches for a particular floor.

 

The proceeds sanctioned has been utilised by the developer for the purpose of construction only and not for anything else. Until and unless any contrary is proved the said interest cost can be capitalised. In my opinion intention of the management should also be considered, whether they intend to complete the remaining 6 floors as well.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
30 September 2026
Senior Accounts Executive

Codeboard Technology

Chennai

MBA

View Details
Company
14 October 2026
Asst. Manager/Dy Manager (Costing)

manufacturing

Pune

CMA

View Details
Company
22 September 2026
Account Assistant

Chirag P Shah & Co. Chartered Accountant

Pune

B.Com

View Details
Company
19 September 2026
Finance Manager

Mugdha Art Studio

Hyderabad

CA

View Details
Company
15 October 2026
Senior Accountant

Continental Belting Pvt Ltd

Mumbai

B.Com

View Details
Company
30 September 2026
Senior Accountant

Codeboard Technology

Chennai

B.Com

View Details
Company
ARTICLESHIP 18 September 2026
Industrial Trainee

Twenty Point Nine Five Ventures Private Limited

Noida

CA Inter

View Details
Company
08 October 2026
Accounts and Tax Associate

POOJA R TELI & CO

Pune

CA Inter

View Details