IND AS 23 - Borrowing Costs

Question 1

Borrowing costs do not include

1: Interest expense calculated using the effective interest rate method as described in Ind AS 109 Financial Instruments

2: Interest in respect of lease liabilities recognized in accordance with Ind AS 116, Leases

3: Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs

4: Interest expenses on own finance resources or interest notional expenses

Answer 1

Interest expenses on own finance resources or interest notional expenses

Question 2

In determining the borrowing costs to be capitalised, the amount of expenditure on a qualifying asset are not reduced by

1: Progress payments received

2: Grants received in connection with the asset

3: Income on temporary investment of specific borrowings

4: Both (a) and (b)

Answer 2

Income on temporary investment of specific borrowings

Question 3

Which of the following would be considered as borrowing cost to be capitalised?

1 : Interest on working capital

2 : Interest on borrowings used for manufacturing inventories in large quantities on a repetitive basis

3 : Interest on borrowings utilised to acquire biological assets measured at fair value

4 : Dividend paid on redeemable preference shares used to fund the development of a qualifying asset

Answer 3

Dividend paid on redeemable preference shares used to fund the development of a qualifying asset

Question 4

Which of the following is not a qualifying asset?

1. Financial Assets
2. Investment properties
3. Intangible plants
4. Bearer plants

Answer 4

Financial Assets