revision question on borrowing cost – IAS 23

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IAS 23 Borrowing Costs requires that borrowing costs directly attributable to the acquisition, construction or production of a ‘qualifying asset’ (one that necessarily takes a substantial period of time to get ready for its intended use or sale) are to be capitalized or included in the cost of the asset once they meet certain conditions.

Required:

Identify THREE conditions that must be met before an entity can commence capitalizing borrowing costs.  

Author: amidu edson

I am certified accountant with more than 5 years of teaching experience. Currently am teaching auditing and assurance, management accounting and financial accounting for student preparing for professional exams such as ACCA and CPA.

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