HI,
whether interest paid on loan taken for "purchase of land",
which is held as "stock in trade" will be capitalized to the value of stock or not?
1 Replies
Stranger
(.)
(5531 Points)
Replied 07 August 2014
No, only in case of qualifying asset which takes substantial period of time to gets itself ready for it's intended use, the interest during this period is capitalised as per AS-16. So in ur case interest will be treated as revenue expenditure which can be claimed from business income & cannot be added to stock valuation as inventories (stock-in-trade) is not a qualifying asset at all.
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