alleryStart learning →Finance charges on assets acquired under finance leases are, per AS 16:
ATreated as grants
BAdjusted against revenue
CPart of borrowing costs
DExcluded entirely
Answer & Solution
Correct answer: C. Part of borrowing costs
Finance lease charges are an explicit item in the list of what borrowing costs may include.
Keep practising AS 16 Borrowing Costs
Browse all AS 16 Borrowing Costs questions for CA Inter, or explore more Accounting topics.
Related questions
Inventories needing a substantial time to reach saleable condition areA plant takes eighteen months to build. Is it a qualifying asset?General borrowing cost incurred in a year is Rs 50,000, but rate times spending gives Rs 6General loans of Rs 5 lakh at 8% and Rs 5 lakh at 12%; Rs 2 lakh spent on the asset. CapitAn asset is normally ready for use when its physical construction isWhen substantial technical work continues, capitalisation is normallyAmortisation of ancillary costs on arranging borrowings isIAS 23 requires disclosing the capitalisation rate and the