Assertion (A): Under Ind AS 23, borrowing costs directly attributable to the acquisition of a qualifying asset must be capitalized. Reason (R): A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. Choose the correct option.
A. A is false but R is true
B. A is true but R is false
C. Both A and R are true but R is NOT the correct explanation of A
D. Both A and R are true and R is the correct explanation of A
Answer: Option D
Solution (By JKSSB Mock Tests)
Ind AS 23 requires capitalization of borrowing costs for qualifying assets. A qualifying asset is defined precisely as one that takes a substantial period to be ready for use or sale. R correctly defines the term and explains the basis for capitalization.
No comments yet. Be the first to start the discussion!