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AS 16 - Advance paid for a truck
Accountancy
In this question, an advance was paid for a truck out of borrowings. As the truck has not been delivered, can I assume that the truck will take a substantial period of time to get ready for intended use, thus considering it as a qualifying asset, and capitalising the relevant interest cost? ICAI material has not capitalised it,
Answers (3)
CA Suraj Lakhotia Admin
No. Truck would be ready when delivered
But there could be a large time gap between when the advance was paid and the truck was delivered no?