08-15-2006, 08:42 PM
lOOK at the first condition for capitalization i.e. the expenditure are being incurred. So, when the expense of 50 in April has not yet being incurred so how can u capitalize the expense of 50 that is incurred in May.
I have confirmed it and this is the right treatment. Plz consult a senior teacher in this regard.
The capitalisation of borrowing costs as part of the cost of a qualifying asset should commence when
(a) expenditures for the asset are being incurred;
(b) borrowing costs are being incurred; and
(c) activities that are necessary to prepare the asset for its intended use or sale are in progress.
I have confirmed it and this is the right treatment. Plz consult a senior teacher in this regard.
The capitalisation of borrowing costs as part of the cost of a qualifying asset should commence when
(a) expenditures for the asset are being incurred;
(b) borrowing costs are being incurred; and
(c) activities that are necessary to prepare the asset for its intended use or sale are in progress.
