Treatment of interest

AS 399 views 1 replies

Ramesh Purbia

107 Points Joined July 2011

Dear sir,

What should be the treatment of interest paid on loan (secured/ unsecured) taken for construction of residential complex by a builder (to be treated as stock in trade) as per AS-16.

Whether it should be treated as direct expense or indirect expense?

Whether it make any difference if amount is paid to partner as interest on capital or salary?

Replies (1)

as per the provision of A S 16 interest upto the date of completion of assets capitalised in cost of assets and interest for the remaining period treated as revenue expenditire and transfer to profit and loss account.