An entity starts the capitalization of borrowing costs to the cost of a qualifying asset when O borrowing costs are being incurred. O all of the above conditions are met. O activities necessary to prepare the asset for its intended use or sale are being undertaken. O expenditures for the asset are being incurred.
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- An entity starts the capitalization of borrowing costs to the cost of a qualifying asset when * A. Expenditures for the asset are being incurred. B. Borrowing costs are being incurred. C. Activities necessary to prepare that asset for its intended use or sale are being undertaken. D. All of the above conditions are met.Which of the following is not a condition that must be satisfied before interest capitalization can begin on a qualifying asset? A) Activities that are necessary to get the asset ready for its intended use are in progress. B) The interest rate is equal to or greater than the company's cost of capital. C) Interest cost is being incurred. D) Expenditures for the assets have been made.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.Any of the following should be met for borrowing cost to be capitalized, borrowing cost are being incurred; activities necessary to prepare the asset for its intended used or sale are being undertaken; expenditures for the asset are being incurred.TRUE OR FALSEAccording 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 * 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 optionsFor 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.In interest capitalization related to self constructed assets, all of the following must occur before the capitalization window begins except: A.Expenditures for the assets have been incurred B.Depreciation of the asset being built has been recognized C.Activities that are necessary to get the asset ready for its intended use are in progress D.Interest has to be incurred
- Net book value is Select one: a. Amount of which an asset is recognized in the balance sheet after deducting any accumulated depreciation. b. Net amount which the entity expects to obtain for an asset at the end of its useful life. c. Amount of cash or cash equivalent paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction. d. Cost of an asset or the amount substituted for cost in the financial statements, less its residual valueEvaluate the following statements:S1. The borrowing cost is capitalized when the entity undertakes activities that are necessary to prepare the asset for the intended use or sale.S2. Borrowing cost incurred while land acquired for building purposes is held without any associated development activity does not qualify for capitalization. a.False, False b.True, True c.False, True d.True, False__________ is defined in the Conceptual Framework as ‘a present obligation of the entity to transfer an economic resource as a result of past events’. Select one alternative: Expense Income Asset Liability