Stage 7 · Selling and delivering
CAS-17: Interest and Financing Charges
The school pays in 60 days, the tailors want paying today. Is the bank’s interest part of what a uniform costs?
What you will learn in CAS-17
- Interest and financing charges (§4)
- Capitalisation and exclusions (§5)
- Presentation in cost of sales (§§7, 8)
Chapters
- Paying for money · Work out the interest on the order (§§4.1–4.3, 5.1, 7)
- The new hall, the late tax, the shares · Decide where each kind of interest goes (§§5.2–5.7, 8)
- Spot the mistakes in the interest schedule · Last challenge of Stage 7 (§§5.2, 5.4, 5.6)
Key terms
- Interest and financing charges (§§4.1–4.3, 5.1, 7): Interest on borrowings, plus charges such as loan processing fees, guarantee commission and exchange differences on foreign loans. Shown as a separate line, outside cost of production.
- Capitalisation and exclusions (§§5.2–5.7, 8): Interest on a loan for an asset that takes a long time to get ready is added to that asset until it is ready. Pretend interest, penal interest and interest on loans for investments never enter cost. Grants reduce interest.
Common questions
Is interest part of cost of production?
No. Interest and financing charges are a separate item of cost of sales (CAS-17; CAS-4 para 5.20).
CAS-17, Interest and Financing Charges. Checked against the standard in November 2026. Selvi Garments, the school order and every figure in this lesson are fictional. Read the official text on the ICMAI Cost Accounting Standards page ↗ before applying it to real work.