Dear CA /CWA Final Students,
Here's one another initiative to give you few questions and answers per day on Various accounting standards ( It is very difficult to stay disciplined to post 1 a day :) but am going to keep it hard as a Task to help my dear students community)
About me : Passionate teacher for Finance students in Bangalore - currently teaching in small batches - FR-FM-TAX-Costing.
You can reach out to me by email : tejas @ tejas.co.in / facebook www.facebook.com/tejaslc
I will be posting the same in facebook too = so its important to follow the post and also this will be a quick revision for all standards key points on question formats.
COPY RIGHT RESERVED :) ---but free for students.
Accounting Standard 28 : Impairment Loss
Qn : Do we need to estimate Recoverable amount of an Asset at every Balance sheet date ?
Not required but it would be good to check if any asset may be impaired and then proceed to check the Net selling price Or Value in use to estimate teh Recoverable amount(Higher of NSP or Value in use) through external sources or Internal sources
Qn : An industry which took a bank loan in July 2011 for construction of their new factory building completed the same in Jan 2012 and put them to use immediately. Can the interest paid on actual amount used for construction be Capitalized ?
ICAI vide ASI(Accounting Standard Interpretation 1) defines the Term Qualifying Asset as an Asset...
> Depends on Facts on circumstances of the case
> Generally capital expansion takes more than 12 months
So for Borrowing cost to be considered for Capitalization the asset should take longer period of time to put to use and intended use. With this as basis - Interest need not be capitalized ( considering rebuttable period as 12 months
CAclubindia
