TMI BlogIX - Borrowing costs (w.e.f. AY 2017-18)X X X X Extracts X X X X X X X X Extracts X X X X ..... losure Standard, the provisions of the Act shall prevail to that extent. Scope 1. (1) This Income Computation and Disclosure Standard deals with treatment of borrowing costs. (2) This Income Computation and Disclosure Standard does not deal with the actual or imputed cost of owners' equity and preference share capital. Definitions 2. (1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified: ( a ) Borrowing costs are interest and other costs incurred by a person in connection with the borrowing of funds and include: ( i ) commitment charges on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that asset. The amount of borrowing costs eligible for capitalisation shall be determined in accordance with this Income Computation and Disclosure Standard. Other borrowing costs shall be recognised in accordance with the provisions of the Act. 4. For the purposes of this Income Computation and Disclosure Standard, capitalisation in the context of inventory referred to in item ( iii ) of clause ( b ) of sub-paragraph (1) of paragraph 2 means addition of borrowing cost to the cost of inventory. Borrowing Costs Eligible for Capitalisation 5. Subject to paragraph 8, the extent to which funds are borrowed specifically for the purposes of acquisition, construction or production of a qualifying asset, the amount of borrowing costs t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fic borrowings; Explanation - For the purpose of this paragraph, a qualifying asset shall be such asset that necessarily require a period of twelve months or more for its acquisition, construction or production. Commencement of Capitalisation 7. The capitalisation of borrowing costs shall commence: ( a ) in a case referred to in paragraph 5, from the date on which funds were borrowed; ( b ) in a case referred to in paragraph 6, from the date on which funds were utilised. Cessation of Capitalisation 8. Capitalisation of borrowing costs shall cease: ( a ) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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