how to deal with interest income on FDRs during the construction of an undertaking? is it a Capital receipt or Revenue???
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Treatment of Expenditure durng construction period
Replies (3)
interest received from the FDR can adjust to the preoperative expenditure
it is a revenue receipt
AS PER MY KNOWLEDGE INTEREST INCOME ON FDRs IS REVENUE RECEIPT AS THE FUNDS WERE NOT ACTUALLY USED FOR CONSTRUCTION WORK INSTEAD OF THAT IT WAS USED FOR EARNING REVENUE
It depends on the purpose for which the FD was made.. Was it a temporary parking of funds or a deposit made as a covenant?
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