Accounting standards
This query is : Resolved
24 December 2007
Dear sir
1)one person take loan for purchase of shares for investment purpose. On that loan he paid interst. What is the treatment for this transaction.
2) question: This person purchased shares 4 years ago.since onwards he capitalized that interest. What is the treatment for this transaction.
1)one person take loan for purchase of shares for investment purpose. On that loan he paid interst. What is the treatment for this transaction.
2) question: This person purchased shares 4 years ago.since onwards he capitalized that interest. What is the treatment for this transaction.
CA Manish Iyer
(Expert)
25 December 2007
Shares is not a qualifying asset and hence any interest on funds borrowed for purchase of shares should be expensed off. The amount of investment has to be written down.
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