The loan interest on the purchase of office buildings should be capitalized if it can be directly attributed to the purchase, construction or production of assets that meet the capitalization conditions. Other loan interest and expenses shall be recognized as expenses according to the amount incurred and included in the current profits and losses.

legal ground

Article 2 of Accounting Standards for Enterprises No.65438 +07-Borrowing Costs

Borrowing expenses refer to the interest and other related expenses incurred by an enterprise due to borrowing.

Borrowing expenses include loan interest, amortization of discount or premium, auxiliary expenses and exchange difference arising from foreign currency borrowing.

essay

The financing expenses related to financial leasing shall be governed by the Accounting Standards for EnterprisesNo. 1. 2 1- lease.

Article 4

If the borrowing costs incurred by an enterprise can be directly attributed to the purchase, construction or production of assets that meet the capitalization conditions, they should be capitalized and included in the cost of related assets; Other borrowing costs shall be recognized as expenses according to the amount incurred when incurred and included in the current profits and losses. Assets eligible for capitalization refer to fixed assets, investment real estate, inventories and other assets that need a long period of purchase, construction or production activities to reach the intended usable or saleable state.