AS - 16

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Borrowing cost also includes :

i)interest cost and commitment charges

ii)amortisation of discount or premium releted to borrowing

iii)amortisation of ancillary costs incurred in connection with arrangement of borrowings

iv)finance charges in respect of assets acquired under finance lease or under other similar arrangements

V)exchange difference arising on foreign currency borrowing to the extent they can be regarded as an adjustment to interest. cost.

Friends pls explain this point ii) and V in detail by quoting example of each it it is possible.Thank you in advance.

Replies (1)

no (ii) :- this is basically issue and redemption of debenture at discount and premium

  when u issue debenture at discount or when u redeem debenture at premium u incurr an exp of discount or premium this expense  is gradually amortised by writting off to p/l year after year this amortised discount or premium is is taken as borrowing cost

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