According to PAS 23, borrowing costs are capitalized when * They relate directly to the acquisition, construction, or production of a qualifying asset. The entity chooses to capitalize them They are material and are expected to be incurred over more than one reporting period. All of the options

According to PAS 23, borrowing costs are capitalized when * They relate directly to the acquisition, construction, or production of a qualifying asset. The entity chooses to capitalize them They are material and are expected to be incurred over more than one reporting period. All of the options

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 14GI

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Question

According to PAS 23, borrowing costs are capitalized when *

They relate directly to the acquisition, construction, or production of a qualifying asset.

The entity chooses to capitalize them

They are material and are expected to be incurred over more than one reporting period.

All of the options

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According to PAS 23, borrowing costs are capitalized when * A. They relate directly to the acquisition, construction, or production of a qualifying asset. B. The entity chooses to capitalize them C. They are material and are expected to be incurred over more than one reporting period. D. All of the options
For borrowing costs to be capitalized as part of the cost of a qualifying asset, the following conditions must be met, except a, The enterprise undertakes activities to prepare the asset for intended use or sale. b.The enterprise incurs expenditures for the asset c. The enterprise incurs borrowing costs. d. The construction is substantially completed and the asset is ready for intended use.
Which of the following is not a condition that must be satisfied before interest capitalization can begin on a qualifying asset? Interest cost is being incurred. Expenditures for the assets have been made. The interest rate is equal to or greater than the company's cost of capital. Activities that are necessary to get the asset ready for its intended use are in progress.
For borrowing costs to be capitalized as part of the cost of a qualifying asset, the following conditions must be met, except The enterprise incurs expenditures for the asset The enterprise incurs borrowing costs. The construction is substantially completed and the asset is ready for intended use. The enterprise undertakes activities to prepare the asset for intended use or sale.
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