Dear Sir/Madam,
I would like to ask one question that if we are buying a fixed asset. The asset is bought through a bank loan (specific bank loan). The amount of interest is charged by bank can be capitalized as a cost of asset or not?
Please note that the asset is not a qualifying asset. This is not going to take a long time to get ready for intended use. The assets is bought and immediately started using it. (Suppose, cash payment is not made may be due to cash flow or any other issue the asset has bought through bank loan).
Thank you for your support and answer.
Tamseel
ACCA Forums
FRInterst cost capitalization
If you mean to address a tutor with "sir/madam" you need to use the ask the FR tutor forum https://opentuition.com/forum/ask-acca-tutor-forums/ask-the-tutor-acca-financial-reporting-fr-exams
But the answer to your question is NO - if you purchase an asset outright with a loan, interest is simply financing cost.
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