IAS 23 Flashcards
What may borrowing costs include?
Interest expense calculated using effective interest method
Finance charges in respect of finance leases
Exchanges differences arising from foreign currency borrowings
What is a qualifying asset?
An asset that takes a substantial period of time to get ready for its intended use or sale
What assets are excluded from IAS 23
Qualifying assets measured at fair value
Repetive, large inventories that take a substantial time period ready for sale
What borrowing costs are capitalised?
Acquisition
Construction
Production
What happens with other borrowing costs?
Recognised as an expense
Costs eligble for capitalisation where funds are borrowed specifically?
Actual costs incurred - income earned on temporary investment of such borrowings
Determining eligible amount where funds are part of a general pool?
Applying a capitalisation rate to expenditure on that asset
Capitalsiation rate for general pool?
Weighted average of the borrowing costs applicable to general pool
When should capitalisation commence?
Rxpenditure incurred
Borrowing costs are incurred
Activities necessary to prepare asset for intended use are in progress
Capitalisation suspended?
Active development interrupted
Capitalisation ceases?
Substantially all activities necessary to prepare asset for intended use or sale are complete
Examples of not qualifying assets?
Financial assets
Borrowing costs directly attributable recognsied as?
An asset
Are assets that are ready for their intended use or sale when acquired a qualifying asset?
No
