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Ind As 23- Illustration 12
Financial Reporting
Sir For the remaining specific Borrowing which is utilised on August 1, Why are we not taking 6 months (upto Jan 31) and taking full period of 10 months. And For General Borrowings we are taking the actual months of incurrence. Can you explain this rule sir? Video Details ------------- Ind AS - CA Final Ind AS 23 Borrowing Costs #17. Illustrations 11 & 12 - Comprehensive examples
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Best Answer
Specific borrowing is for that particular project if we spend on different time also we have to pay int for full period because we have kept money with us for the intention of using the fund to this particular project and once the conditions of capitalisation is accepted we can start capitalisation, Here purpose of taking loan is imp For general we need to capitalise from the day of incurring the expense A simple example is in specific borrowing if we invest additional funds and earn returns we deduct the same from borrowing cost, in this case also capitalisation will be calculated from the date of satisfying the capitalisation condition,
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