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Suhana Ltd. Q No. 4. Substantial period of time
Accountancy
Sir, In the definition, Its given that 12 months is usually considered as substantial period of time for Qualifying Asset, But in this question, It's 11 months only, How is it right for us to assume that it is a substantial period? And no other data given such as co. considers 11 month also as substantial period of time. Is it okay to consider any period of time as substantial period if not given in case of construction?? If its less than 12 months, Isn't the Question supposed to be given "as per accounting policy of Co. N no. Months can be considered as substantial time?? [Video Time Stamp: 08:33] Video Details ------------- P1 - Accounting Standards - CA Inter AS 16 #8. Q&A - Part 2
Answers (1)
The question should have mentioned or alternatively we can take our assumptions. The 12-month period is only a general guideline, not a strict rule. If an asset takes close to 12 months (like 11 months) and is construction-related, it can still be treated as a qualifying asset
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