Source- ICAI MCQ Booklet Q.17.3
For calculating Depreciation on computers, shouldn’t we capitalise the interest expenditure incurred between 15.05.2021-15.10.2021, coz asset was purchased on 15.05.2021; & interest to be expensed off to P/L should be the interest incurred from 15.04.2021 to 15.05.2021 & 16.10.2021- 31.03.2022.
ICAI has capitalised interest exp incurred from 15.04.2021.
No because Loan was specifically taken for Asset . So even as per Borrowing acost rule we capitalise the interest in cost of asset
But capitalisation of interest cost should commence from 15.05.2021( DT of purchase of asset) instead of 15.04.21.
Wo toh advance payment bhi ho sakta hai right . Toh it’s basis of assumption to be honest .
But accounting ke hisab se chale toh 15/4 hi hoga
Whole of interest on loan taken for purchase of an asset shall be capitalized for the period before the asset is put to use. Hence it is right to capitalize from the date of loan itself.