CAF-1 · Chapter 2 · Question 15 of 15
If an entity incurs minor modifications, such as decorating a property to a user's specification, does capitalization of borrowing costs continue?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) No, because substantially all core activities are considered complete.
Explanation
If only minor modifications like decoration are outstanding, this indicates substantially all activities are complete and capitalization should cease.
More IAS 23 Borrowing Costs MCQs
- Q2Under IAS 23, which of the following is NOT considered a borrowing cost?
- Q3Delta Inc. borrowed Rs. 40 million specifically to construct a qualifying asset. Before the funds were needed for construction, Delta…
- Q4Which of the following is typically excluded from being a 'qualifying asset' under IAS 23?
- Q5Which of the following costs is NOT considered a borrowing cost under IAS 23?
- Q6What is the condition for capitalizing borrowing costs regarding the probability of economic benefits?