Accounting Standard 6th and 18
PROJECT ON ACCOUNTING STANDARDS
1 ) ACCOUNTING STANDARD 16
2 . ACCOUNTING NORMAL 21
PROF. T. K. NAGPAL
SUBMITTED BY: VARUN FN3 FN2
Accounting Standard (AS) 16
(This Accounting Standard includes paragraphs set in striking italic type and simple type, that have equal power. Paragraphs in bold italic type indicate the main principles. This Accounting Standard should be read inside the context of its goal and the Preamble to the Claims of Accounting Standards1. ) The following is the written text of Accounting Standard (AS) 16, вЂBorrowing Costs', given by the Council of the Company of Chartered Accountants of India. This Standard has effect in regards to accounting times commencing on or after 1-4-2000 and is necessary in character. 2 Paragraph 9. two and passage 20 (except the initial sentence) of Accounting Common (AS) twelve, вЂAccounting to get Fixed Assets', stand withdrawn from this particular date. Objective
The goal of this Assertion is to prescribe the accounting treatment to get borrowing costs. Scope
1 . This Affirmation should be used in accounting for borrowing costs. 2 . This Assertion does not handle the actual or perhaps imputed cost of owners' value, including preference share capital not classified as a responsibility. Definitions
three or more. The following terms are used through this Statement while using meanings specific: Borrowing costs are interest and other costs incurred simply by an venture in connection with the borrowing of funds. A qualifying asset is a property that automatically takes a substantial period of time3 to get ready due to the intended employ or sales. 4. Funding costs might include:
(a) interest and dedication charges in bank borrowings and other immediate and long-term borrowings; (b) amortization of discounts or premiums associated with borrowings; (c) amortization of ancillary costs incurred in connection with the agreement of borrowings; (d) financial charges in regards to assets acquired under fund leases or under different similar preparations; and (e) exchange variations arising from money borrowings towards the extent they are regarded as a great adjustment to interest costs.
5. Types of qualifying possessions are manufacturers, power era facilities, inventories that require an amazing period of time to get them to a saleable condition, and an investment property. Other assets, and those stocks that are often manufactured or perhaps produced in large quantities on a repeating basis over the short period of the time, are not determining assets. Resources that are looking forward to their designed use or perhaps sale when acquired are also not qualifying assets.
6. Asking for costs which have been directly attributable to the buy, construction or production of the qualifying advantage should be made a fortune as part of the expense of that property. The amount of funding costs eligible for capitalization ought to be determined according to this Affirmation. Other credit costs should be recognized as a cost in the period in which they may be incurred. 7. Borrowing costs are capitalized as part of the expense of a qualifying asset launched probable that they may result in upcoming economic rewards to the enterprise and the costs can be scored reliably. Other borrowing costs are named an expense inside the period in which they are sustained.
Borrowing Costs Eligible for Increased
8. The borrowing costs that are immediately attributable to the acquisition, building or production of a being approved asset are those asking for costs that might have been avoided if the spending on the being qualified asset has not been made. When an...