alleryStart learning →General borrowing cost incurred in a year is Rs 50,000, but rate times spending gives Rs 65,000. Capitalise?
ARs 1,15,000
BRs 50,000
CRs 65,000
DRs 15,000
Answer & Solution
Correct answer: B. Rs 50,000
Capitalisation is limited to the Rs 50,000 actually incurred in the period.
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 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 theGeneral loans: $2,000,000 at 6% and $3,000,000 at 8%. Weighted average rate?