Accounting standards 16, Schemes and Mind Maps of Financial Accounting

Download Accounting standards 16 and more Schemes and Mind Maps Financial Accounting in PDF only on Docsity! Hetul Agrawal __ (_captatsation ») Includes - 1. Interest on loan, interest on debentures bonds 2. Amortization of discount on issue debentures premium on redemption 3. Ancillary cost amortization 4. Interest included in hire purchase installments, leases 5. Commitment charges 6. DIER ( upto amt of borrowing cost) 1. Directly related to acquisition construction development of qualifying asset 2. Future economic Types (_ types of borrowings) (_ types of borrowings) 1. General borrowing Weighted average capitalisation is used 2. Specific borrowings -for specific asset Capitalised amt is = actual borrowing AS 16 borrowing cost income on temporary investment of borrowed amt Takes substantial period (12 months) of time in getting ready for intended use or sale Qualifying asset Entries While calculating interest to be capitalised from average accumulated expense 1. Asset dr. 3. ir or amount of specific borrowing must be 2. DIER dr, atoLae. deducted and then should be multiplied with weighted average rate of interest To loan. To DIER Calc of actual int - Amt of loan x actual rate x clasing exch rate ¢Construction of any link/ factory bullding /shed v *purchase of machine/equipments /technical know how / fixes asset. x eworking capital x eadvances. x Calc of int if loan taken in India - Amt of loan x ROI of india x opening exch rate 1. If suspense is unavoidable/ substantial, TT TT technical and administrative work - Cessation }—— Virtually complete /can be put to use capitalised 2. Avoidable- charged from P&L