Query on a.s. 16

Hello Mr. Neeraj,

As per the Explanation provided in AS - 16,

"What constitutes a substantial period of time primarily depends on

the facts and circumstances of each case. However, ordinarily, a

period of twelve months is considered as substantial period of time

unless a shorter or longer period can be justified on the basis of

facts and circumstances of the case. In estimating the period, time

which an asset takes, technologically and commercially, to get it

ready for its intended use or sale is considered."

Hence, you should capitalise the expense of Interest on Loan account.

Regards,

Yatrik Jobanputra

+91 90333 08699