F4 - Fixed Assets

Question 1

Total interest incurred equals

Answer 1

The interest on the specific construction debt plus interest on the other borrowing.

Question 2

Capitalized interest equals

Answer 2

The smaller of the total interest incurred or the avoidable interest.

Question 3

Land costs include:

Answer 3

The costs of getting the land ready for intended use which includes razing old buildings less salvage plus title insurance and legal fees.

Question 4

Interest incurred during construction period should be:

Answer 4

Capitalized, based on the weighted average of accumulated expenditures, as part of the cost. Interest cost incurred before and after the construction period should be expensed as well as interest

Question 5

Leasehold improvements are:

Answer 5

Capitalized and then amortized over the LESSER of the life of the improvements or the remaining term of the lease.

Question 6

Under IFRS, investment property is defined as:

Answer 6

Land and buildings held by an entity to earn rentals or for capital appreciation.