Capitalisation of part of the premises (Partly constructed)

This query is : Open

harpreet singh (Querist)
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03 March 2010 A company is in the process of contructing building of 20 floors. And 5 floors are almost completed and ready for its intended use.

My query is :-
1) can we do the partiall capitalisation for these 5 floors.?

2) Is there is any specific provision for the same in the Accounting standard?

3) If yes then what should be the basis for allocating the cost for these 5 floors?

M Prabhakar Menon

M Prabhakar Menon (Expert)
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03 March 2010 What is the purpose for which the building is being built? Is it for creating an asset for the company or for real estate business? Depending on your answers u can decide to capitalise.AS10 issued by ICAI to be followed

harpreet singh

harpreet singh (Querist)
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03 March 2010 It will be used by the company fot its own use. And the company is in existence from the last 10 years. it is planning to relocate to the new premises.

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