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AS 16
BORROWING COSTS (issued in 2000)
Objective: The
objective of this Standard is to prescribe the accounting
treatment
for borrowing costs.
Scope:
This Standard should be applied in accounting for borrowing
costs. And it does
not deal with the actual or imputed cost of owners’ equity,
including preference share capital not classified as a
liability.
Definitions: Borrowing
costs: Costs are
interest and other costs incurred by an enterprise in connection
with the borrowing of funds. Qualifying
asset: It is an
asset that necessarily takes a substantial period of time to get
ready for its intended use or sale. Borrowings
are two types they are General borrowings and Specific
borrowings. How to and
what to Capitalize & Cessation of borrowing costs:
Disclosure requirements: The
following should be disclosed: The
accounting policy adopted
for borrowing costs The
amount of borrowing costs
capitalized during the period.
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