What are borrowing costs as per Accounting Standard 16? When would borrowing costs be capitalized ?

The objective of AS 16 is to prescribe the accounting treatment for borrowing costs. Borrowing costs are interest and other costs incurred by an enterprise in connection with the borrowing of funds. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset should be capitalized as part of the cost of that asset. The amount of borrowing costs eligible for capitalization should be determined in accordance with this Standard. Other borrowing costs should be recognized as an expense in the period in which they are incurred. The financial statements should disclose The accounting policy adopted for borrowing costs The amount of borrowing costs capitalized during the period.