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December 29, 2020 at 2:07 pm
Hi All, Did someone manage to know why we use 9/10 and 1/10 instead of 9/12 and 1/12. I have all the above questions, but cant seem to find the answer? Can someone please very kindly reply ?
November 7, 2020 at 7:49 am
Hi Chris, what are the corresponding credit entries for both scenarios
i.e Dr Asset Cr?
Dr SPL Finance Costs Cr?
August 2, 2020 at 7:08 pm
Could you please explain this for me?
So based on the rules… i agree that 9/12 * 500 = 375 should be capitalised. But within those 9 months, 1 month does not qualify to be capitalised due to the ceased operations.
So should the 1 month interest not be deducted from the 375 to give you capitalised interest of 333?
October 12, 2020 at 6:32 pm
1st March to December are 10 months and out of 10 months one month was on strike. So in nutshell we have 9 months to capitalize and 1 month to expenditure.
April 15, 2020 at 8:48 am
November 18, 2019 at 10:22 pm
Could you please explain me why did you count month instead of days? As I remember interests should always been calculated on a daily basis. And 1 month can consist of different days: October – 31, Septebmer – 30, February – 28/29
February 4, 2020 at 6:35 am
Bro igor why do you want to take complicated path see 5% is the depreciation charged per year so as we stopped the work for just 1 month we just need to look at months where the work is going on and charge depreciation for those months so if you cal “interest per day” or “interest per month” it doesn’t make much difference
September 5, 2019 at 1:04 pm
Thank you very much for these lecture videos. My question is, why did we use 9/12 months to calculate amount to be capitalised and 1/12 months for amount to be expensed, instead of 9/10 and 1/10 respectively?
October 4, 2019 at 9:08 pm
9 months out of 12 1 out of 12 months
January 14, 2020 at 12:50 pm
why 12 month when the loan was from march 2015 and not January 2015
January 22, 2020 at 8:17 pm
The rate of interest on the borrowing is based on 12 months’ period, also called an annual percentage rate.
October 16, 2020 at 7:53 am
I have the same question. We are capitalizing 9 months and charging another as an expense. What happens with the other 2 months?
September 5, 2019 at 1:03 pm
Thank you very much for these lecture videos. My question is, why did we use 9/12 months to calculate amount to be capitalised and 1/12 months for amounts to be expensed, instead of 9/10 and 1/10 respectively?
August 15, 2019 at 3:53 pm
Why 9/12 or 1/12 why it’s should be 1/10 , 9/10
July 27, 2019 at 2:13 pm
Hi, if both the construction and the loan commenced on the 1st march, should the interest not be based on 9/10 and 1/10 rather than 9/12 and 1/12 as the interest charged would not have been for a full 12 months in the financial period.
January 31, 2019 at 1:51 am
Hi Sir, Why are we using 9/12 and 1/12 when construction started in March till December? shouldn’t it be 9/10 and 1/10?
May 20, 2019 at 11:06 am
If there is no additional information, u often understand the interest rate is annual rate. So 5% per year, 12 months.
January 4, 2019 at 10:36 pm
Easy to follow lecture . Thank you sir.
October 19, 2018 at 5:16 pm
So Sir, is that one month expense the month when there was no construction i.e. 1 Oct to 1 Nov? and if so, that’s what we do? Expense whenever there is no construction?
October 19, 2018 at 9:28 pm
Yes, that’s correct. Always keep an eye out for it in any exam question.
August 26, 2018 at 10:48 pm
I have noticed that you calculated two answers one for sfop and I/S, is there supposed to be a double entry always?
July 1, 2018 at 12:23 pm
Sir why we use 10 months instead of 12 months?
July 1, 2018 at 8:14 pm
The assumption is that the loan and construction both commenced on 1 March.
September 30, 2020 at 8:38 pm
Just one thing. Colombia in South America is written Colombia, not Columbia. I say that because it’s my country of birth. 😉
Thank you SO much for your lectures. You all guys are amazing.
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