Depreciation

This query is : Resolved

Aashish Tiwari (Querist)
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24 May 2011 Dear all,

Suppose i bough a machinery worth rs 1000000 from the Bank borrowing say 8 % loan. it means annual interest is to be 80000. But i have not put to use the machinery into the production during the year. How can i show the interest amount in my financial statments. should the interest amount be capitalised?. How can i claim depreciation at which amount of 10 lakhs?

Thanks & Regards
Ashish h tiwari
(MBA, IPCC)

CS Bijoy

CS Bijoy (Expert)
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24 May 2011 Interest amount can be capitalized if the loan is taken after establishment of business but before commencement of the business and the amount of interest paid in this period can only be capitalized.