My company building and stock pledge by against for Packing credit loan and bank chg a sum ruppee of 8000 for insurance premium for building and stock safety and now ques is arise that's where we book the exp in books of account in Bank Chg ? / Insurance Premium any other head plz reply
2 Replies
kckinn
(CA)
(759 Points)
Replied 22 December 2010
Interesting situation.
I will surely come back to see what the correct treatment is as suggested by experts.
As per my basic knowledge, such Rs 8,000 should be treated as borrowing cost.
Dhawal Mohnot
(Practicing)
(449 Points)
Replied 23 December 2010
You cannot capitalise insurance premium paid on assets. In my opinion it is not a borrowing cost. I guess Should be booked as insurance premium only.
Any other opinion invited.
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