07-02-2007, 05:03 PM
Dear,
I could not exactly understand ur query. Still, I wish to clarify the things pertaining to IAS 23.
As per IAS 23 there are two treatments of borrowings costs.
Benchmark treatment This requires to include all borrowing costs (incurred for whatever purposes) in the profit and loss acount.
Allowed alternative treatment This method allows to capitalise the directly attributable borrowing cost as a part of cost of a qualifying asset.
The seperate disclosure of what amount of borrowing cost has been caitlaized in the cost of a qualifying asset (along with capitalization rate used etc) will obviously required only if such cost has been capitalised by following the allowed alternative treatment.
If an entity follows benchmark treatment, it will never capitalize any borrowing cost and all borrowing costs, incurred for whatever purposes, will be charged to profit and loss account.
Therefore, in suc situation, no question arises for the disclosue of any borrowing cost capitalized as part of the asset.
If you have some other query regarding my above clarification, plz let me know.
Regards,
Kamran.
I could not exactly understand ur query. Still, I wish to clarify the things pertaining to IAS 23.
As per IAS 23 there are two treatments of borrowings costs.
Benchmark treatment This requires to include all borrowing costs (incurred for whatever purposes) in the profit and loss acount.
Allowed alternative treatment This method allows to capitalise the directly attributable borrowing cost as a part of cost of a qualifying asset.
The seperate disclosure of what amount of borrowing cost has been caitlaized in the cost of a qualifying asset (along with capitalization rate used etc) will obviously required only if such cost has been capitalised by following the allowed alternative treatment.
If an entity follows benchmark treatment, it will never capitalize any borrowing cost and all borrowing costs, incurred for whatever purposes, will be charged to profit and loss account.
Therefore, in suc situation, no question arises for the disclosue of any borrowing cost capitalized as part of the asset.
If you have some other query regarding my above clarification, plz let me know.
Regards,
Kamran.
