Capitalisation of borrowing cost

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VIPIN KUMJAR (Querist)
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07 December 2011 Whether the borrowing cost incurred in respect of loan taken specifically for the purpose of acquiring the land can be capitalised with the cost of landas per as-16.

RONAK DARJI

RONAK DARJI (Expert)
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07 December 2011 As per my knowledge..

Purchase of land for construction is exclude under AS-16.

You cant capitalize Purchase land but you can capitalise any of following..

1.material
2.payment to contractor
3.ANY EXP INCURRED ON OR BEFORE COMPLETION OF CONSTRUCTION WILL BE CAPITALISE THAT IS DR TO ASSET A.C AND AFTER THAT ALL WILL BE CHARGED TO REVENUE THAT IS TOTALLY DR TO P/L A.C

Regards,
Ronak Darji

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