CAS 17 - Interest and Financing Charges

Question 1

Definition

Answer 1

Cost incurred by an enterprise in connection with borrowing of funds or other costs which represents payment for the use of non equity fund

Question 2

Principles of measurement

Answer 2

1. Interest and financing charges
   a) Related to asset- part of cost of an asset
   b) Related to product- Not part of cost of product
2. Int recvd or paid on investment is not part of cost of product or service or activity

Question 3

General Principles

Answer 3

3. Imputed cost is included ( only materials)
4. Subsidy, grant or incentives shall be reduced
5. Penalties ,damages, fines paid to stat auth not cost

Question 4

Assignment of cost

Answer 4

1. Cause and effect
   a) Cause- Process, operation or activity
   b) Effect- Incurrence of cost
2. Benefits received- Actual benefits received

Question 5

Presentation

Answer 5

1. Seperate cost element of cost of sales in cost statement

Question 6

Disclosre

Answer 6

1. Basis of distribution
2. Std rates- variance
3. Related party transaction
4. Subsidy, grant, incentives recvd is reduced