AS 16: Borrowing Costs

AFM Definition, Scope & Accounting Standards including Ind AS Free JAIIB Capsule 44 views Updated
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AFM · Definition, Scope & Accounting Standards including Ind AS
Under AS 16, what is the accounting treatment for borrowing costs directly attributable to the acquisition or construction of a qualifying asset?
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Such borrowing costs should be capitalised as part of the cost of the asset. Other borrowing costs are recognized as an expense.
A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.
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AS 16: Borrowing Costs — Full Text

Under AS 16, what is the accounting treatment for borrowing costs directly attributable to the acquisition or construction of a qualifying asset?

Answer

Such borrowing costs should be capitalised as part of the cost of the asset. Other borrowing costs are recognized as an expense.

Additional notes

A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

Part of Accounting & Financial Management for Bankers · Definition, Scope & Accounting Standards including Ind AS · Last updated

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