A: Item (1) of Article 21 of the Measures for the Treatment of Enterprise Income Tax on Real Estate Development Business (Guo Shui Fa [2009] 31No.) stipulates that the borrowing costs incurred by enterprises in borrowing funds for the construction and development of products that meet the tax requirements can be collected and distributed in accordance with the provisions of the Accounting Standards for Business Enterprises, and the borrowing costs belonging to financial expenses can be directly deducted before tax.

The Accounting Standards for Business Enterprises No.65438 +07- Borrowing Costs stipulates that 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 are recognized as expenses according to the amount incurred and included in the current profit and loss.

Borrowing costs can only be capitalized when the following conditions are met:

(1) Asset expenditure has occurred, including cash payment for purchasing, constructing or producing assets eligible for capitalization, transfer of non-cash assets or bearing interest-bearing debts;

(2) The borrowing costs have been incurred;

(3) The purchase, construction or production activities necessary to make the assets reach the intended usable or saleable state have started.

If the assets that meet the capitalization conditions are abnormally interrupted in the process of purchase, construction or production, and the interruption time exceeds three months, the capitalization of borrowing costs shall be suspended. The borrowing costs incurred during the interruption period shall be recognized as expenses and included in the current profits and losses until the purchase, construction or production activities of the assets are resumed.

The capitalization of borrowing costs will stop when the assets that meet the capitalization conditions are purchased, constructed or produced to reach the predetermined usable or saleable state. Borrowing expenses incurred after the assets that meet the capitalization conditions reach the predetermined usable or saleable state shall be recognized as expenses when incurred and included in the current profits and losses.

Article 37 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulates that reasonable borrowing costs incurred by enterprises in their production and business activities that do not need capitalization are allowed to be deducted. Where an enterprise borrows money for the purchase and construction of fixed assets, intangible assets and inventories that have been built for more than 65,438+02 months, the reasonable borrowing costs incurred in the process of purchasing and constructing related assets shall be included in the cost of related assets as capital expenditures and deducted in accordance with the provisions of these Regulations.

According to the above provisions, the capitalization of the borrowing costs of real estate development enterprises should start when the development project is obtained, and the deadline should be the completion acceptance date of the development project. The borrowing costs before and after this should be included in the current profit and loss. If there is abnormal interruption of real estate development and construction for more than 3 months, the capitalization of borrowing costs should be suspended.

What are the project cost items of construction enterprises?

Jian 'an expenses are divided into direct expenses, indirect expenses, management expenses and financial expenses according to whether they are directly used in the construction process.

1. Direct cost refers to the direct consumption of construction and installation, including:

1, material cost, refers to the cost of purchasing various building materials, such as steel, cement, sand and gravel;

2, labor costs, refers to the wages and welfare expenses of workers directly engaged in engineering construction;

3, machinery use fee, refers to the cost of using construction machinery in engineering construction;

4. Other direct costs, such as on-site construction water, electricity, night construction and winter rainy season construction, etc. Indirect expenses refer to various expenses incurred by the construction unit for organizing and managing the construction production activities, including the salary of the management personnel of the construction unit, employee welfare expenses, depreciation expenses, office expenses, travel expenses and transportation expenses, labor protection expenses, etc.

The direct cost and indirect cost of the project constitute the project construction cost, and the shared management cost and financial cost constitute the complete construction and installation project cost.