CAF-1 · Chapter 2 · Question 13 of 15
An entity completes a business park in stages, where each building can be used independently. What is the rule for ceasing capitalization?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Cease capitalization for each building as its specific necessary activities are substantially completed.
Explanation
If an asset is completed in parts and each part can be used independently, capitalization ceases for a specific part when its necessary activities are substantially complete.
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