Ministry mandate Indian GAAP
The Corporate Affairs Ministry has decided not to allow Power Sector companies to capitalise the borrowing costs incurred during the extended delay in commencement of commercial production, even if the plant was otherwise ready. Also, in cases of phased operationalisation of projects, the costs attributable to the completed phases - which were previously being capitalised till the entire project was complete - would have to be now charged to the profit and loss account. The clarification only reiterates the existing principles in the accounting standards, it is expected to bring in consistency in the application of these principles.
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