As-16 borrowing cost

This query is : Resolved

Prakhar (Querist)
Follow

23 May 2014 when asset is treated as qualifying? in some questions advance to supplier for machine is treated as qualifying n in some it is not! whts the concept!???

CA John Abraham Austin ACA

CA John Abraham Austin ACA (Expert)
Follow

23 May 2014 Dear Prakhar,

As per AS 16, Qualifying Assets refers to "those assets which takes SUBSTANTIAL PERIOD of time for its INTENDED USE or SALE".

Also, it clarifies that Substantial Period may be regarded as a period exceeding 12 months.

So, the answer depends upon your assumption whether the asset in the question takes SUBSTANTIAL period for its intended use of sale.

I hope it is clear.