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CA Final Ind AS 23 Borrowing Costs and Ind AS 40 Investment Property — practice questions

Explore 81 free Ind AS 23 Borrowing Costs and Ind AS 40 Investment Property questions in CA Final Financialreporting. Open each question or exercise to read its content, reference answers and available explanation.

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Ind AS 23 Borrowing Costs and Ind AS 40 Investment Property questions and exercises with answers

Showing questions 1–30 of 81.

Which borrowing costs does Ind AS 23 capitalise?Read the answer and worked solution →A qualifying asset needs what to get ready?Read the answer and worked solution →Non-attributable borrowing costs are treated how?Read the answer and worked solution →What are borrowing costs under Ind AS 23?Read the answer and worked solution →Ind AS 23 expressly excludes which cost?Read the answer and worked solution →Which asset fails the qualifying test?Read the answer and worked solution →Ind AS 23 may skip inventories made how?Read the answer and worked solution →Ind AS 23 need not apply to which asset?Read the answer and worked solution →Which method gives interest under Ind AS 109?Read the answer and worked solution →Which lease item can be a borrowing cost?Read the answer and worked solution →Exchange differences are borrowing costs how far?Read the answer and worked solution →Directly attributable costs are those that would be what?Read the answer and worked solution →Specific loan: capitalised cost is actual less what?Read the answer and worked solution →A Rs 10 lakh specific loan at 9% p.a. earns Rs 12,000 on deposit. Cost capitalised for a full year?Read the answer and worked solution →Rs 5 crore specific loan at 8% p.a. for a full year; Rs 1 crore sits on deposit at 5% for 6 months. Capitalise?Read the answer and worked solution →General borrowings are costed by applying what?Read the answer and worked solution →General loans: Rs 20 lakh at 6%, Rs 30 lakh at 8%. Weighted rate?Read the answer and worked solution →General loans of Rs 40 lakh at 9% and Rs 60 lakh at 11% fund a Rs 50 lakh spend. Capitalise for a year?Read the answer and worked solution →Until the asset is ready, the pool rate excludes which loans?Read the answer and worked solution →Formula gives Rs 70,000; actual cost incurred is Rs 50,000. Capitalise?Read the answer and worked solution →Which is NOT a condition to start capitalising?Read the answer and worked solution →Which counts as expenditure on a qualifying asset?Read the answer and worked solution →Expenditure on the asset is reduced by which receipts?Read the answer and worked solution →Which counts as preparing an asset for use?Read the answer and worked solution →During extended suspension of development, what happens?Read the answer and worked solution →Rs 40 lakh loan at 10%; capitalised for 6 months only. Amount?Read the answer and worked solution →When does capitalisation cease?Read the answer and worked solution →An asset is normally ready when what is complete?Read the answer and worked solution →For a business park of usable buildings, capitalisation stops when?Read the answer and worked solution →Which asset must be wholly complete before any use?Read the answer and worked solution →

Worked practice questions

Which borrowing costs does Ind AS 23 capitalise?

  1. Interest on overdrafts only
  2. All interest of the year
  3. Interest on bank loans only
  4. Those tied to a qualifying asset
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Correct answer: D. Those tied to a qualifying asset

Only costs directly attributable to acquiring, constructing or producing a qualifying asset form part of that asset's cost; others are expensed.

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A qualifying asset needs what to get ready?

  1. A few weeks at most
  2. Over five years always
  3. Exactly one financial year
  4. A substantial period of time
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Correct answer: D. A substantial period of time

The definition turns on a substantial period, with no fixed number of months or years prescribed.

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Non-attributable borrowing costs are treated how?

  1. Added to inventories
  2. Amortised over five years
  3. Expensed when incurred
  4. Set off against reserves
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Correct answer: C. Expensed when incurred

Costs outside the capitalisation criteria are charged to profit or loss in the period they are incurred.

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More Financialreporting topics

Ind AS 116 LeasesInd AS 36 Impairment of Assets and Ind AS 38 Intangible AssetsInd AS 24 Related Party Disclosures and Ind AS 108 Operating SegmentsInd AS 1 Presentation of Financial StatementsInd AS 12 Income TaxesInd AS 113 Fair Value MeasurementInd AS 109 Financial InstrumentsInd AS 103 Business Combinations