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Reply from VidhyaDhar on Sep 10 at 12:19 AM Hi,
As I told you before, the cost manager would like to consider all costs,
especially interest ( both real and notional ) which would help him in
various activities such as pricing his merchandise, determining P-V
ratios, establishing standard costs for each product dealt with etc. Such
interest calculated in the cost depreciation may be for statistical
inferences or for generating even profit and loss accounts to determine the
profit / loss in the cost depreciation area. Since Fixed assets involve
tying up lot of investment cost (have you not heard of why and how
opportunity costs are worked out ? ), it would be a lot more precise and a
wiser idea to include interest for costing purposes. But since notional
costs are virtual and not real and therefore cannot feature in book
depreciation area, such computations are usually restricted to the cost
depreciation area only.
Regards,
VidhyaDhar
| | | ---------------Original Message---------------
From: Dau Thanh Hai
Sent: Sunday, September 09, 2012 11:53 PM
Subject: Posting Interest Calculation for Fixed Assets
Hi,
I am sorry for delaying to reply. I just wanted to find a concrete example but I didn't see any case. I also read that we can calculate imputed interest on assets, and also, we can post interest into G/L accounts. I just want to test posting to see if it works. And finally I can see it works, but still not able to find any business requirement or document saying why we should post.
Thanks for your reply.
Regards,
Dau |
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