Question

A company begins construction of a qualifying asset funded partly from general borrowings. Work was suspended for 5 months due to a strike. Should borrowing cost capitalisation continue during suspension?

Capitalisation of borrowing costs is suspended during extended periods when active development is interrupted. Resume when construction restarts.

A Yes, borrowing costs are always capitalised.

B No, suspend capitalisation during prolonged suspension.

C Capitalise half of costs during suspension.

D Expense all borrowing costs, regardless of suspension.

E Capitalise if management intends to complete later.

More Accounts Questions