Study On The Capitalization Of The Borrowing Costs And Expenses Of MN Company

The cost of borrowing is refers to the enterprise because of loan interest and other costs related to the occurrence of.The borrowing costs incurred by an enterprise,can be directly attributed to the qualified asset under acquisition and construction or production,it shall be capitalized and recorded into the costs of related assets,that is,the capitalization of the borrowing costs;other borrowing costs shall be on the basis of the actual amount incurred are recognised as an expense and included in the current profits and losses,that is,borrowing costs expenses.How much is the borrowing costs incurred after the capital or the cost of and the amount directly affect the confirmation and measurement of the enterprise cost,thereby affecting the financial conditions and operating results of enterprises,accounting for the capitalization of the borrowing costs and expenses has important practical significance for the accurate measurement of fixed assets cost,strengthen financial management,real to reflect the financial position and operating results and improve the quality of enterprise accounting informationAssets eligible for capitalization for the acquisition and construction or production company,should first distinguish the various assets expenditure in the source of funds,is a special loan,the general borrowing or its own funds,should be based on the purchase of assets eligible for capitalization of borrowing costs to use special principle,when the assets accumulated expenditure beyond the specific borrowings,the remaining cannot distinguish the source of funds assets expenditure in accordance with the first,then the general borrowing assumed order of its own funds expenditure.When the enterprise also has a number of built in engineering project and the bank loan,the occurrence of the capitalization of the borrowing costs of interest will be allocated by a standard refinement of capitalization of the borrowing costs to the project assets,the actual expenditure as a reasonable weight distribution in eligible for capitalization of the asset cost.Enterprises should be based on the principle of substance over form,simplified correction formula to calculate loan interest capitalization of borrowing costs should be capitalized amount to determine the reasonable,inconsistent problem solving interest loan accounting rules of calculation process of the method and practice.Through modification of the capitalization of the borrowing costs and expenses of confirmation and measurement of MN company,analyzes its influence on the company profit and loss situation.Through the improvement methods and measures of enterprise the capitalization of the borrowing costs and cost accounting through discussion,improve enterprise management level of borrowing costs accounting,financial position and operating results objectively reflect the enterprise.Especially at the present stage,the grim situation of iron and steel industry,enterprises meager profits or even losses,borrowing costs stay high,the hope can help MN company to further enhance the management level,improve economic efficiency,the realization enterprise strategic target,also hope to have certain reference function to the relevant enterprises.