CAF-1 · Chapter 2 · Question 10 of 15
When are borrowing costs generally considered to cease being capitalized?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) When substantially all activities necessary to prepare the asset for its intended use or sale are complete.
Explanation
Capitalization ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.
More IAS 23 Borrowing Costs MCQs
- Q12For funds borrowed generally, how is the amount of borrowing costs eligible for capitalization determined?
- Q13An entity completes a business park in stages, where each building can be used independently. What is the rule for ceasing capitalization?
- Q14Which of the following must an entity disclose in its financial statements regarding borrowing costs?
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- Q1Which of the following assets would typically be classified as a 'qualifying asset' under IAS 23, allowing for the capitalization of…