TMI BlogComparison of ICDS-IX, AS-16 & IndAS-23X X X X Extracts X X X X X X X X Extracts X X X X ..... t and other costs incurred by an enterprise in connection with the borrowing of funds. Borrowing costs may include: (a) interest and commitment charges on bank borrowings and other short-term and long-term borrowings; (b) amortisation of discounts or premiums relating to borrowings; (c) amortisation of ancillary costs incurred in connection with the arrangement of borrowings; (d) finance charges in respect of assets acquired under finance leases or under other similar arrangements; and (e) exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs. Borrowing costs are interest and other costs that an entity incurs in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. (IndAs is silent on number of months or determination of specific period to make assets as qualifying assets.) Commencement of Capitalisation The capitalisation of borrowing costs shall commence: a) in as case where funds specifically borrowed for obtaining qualifying asset, from the date on which funds were borrowed. b) in other case, from the date on which funds are utilised. The capitalisation of borrowing costs shall commence from the date all the following conditions are satisfied: a) expenditure for a acquisition, construction or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se in case of qualifying asset other than inventory. Capitalization of borrowing costs shall cease when substantially all the activities necessary to prepare such inventory for its intended sale are complete. An entity shall cease capitalising borrowing costs when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete. When an entity completes the construction of a qualifying asset in parts and each part is capable of being used while construction continues on other parts, the entity shall cease capitalising borrowing costs when it completes substantially all the activities necessary to prepare that part for its intended use or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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