1. avatar says

    Dear Mike little,
    Am having problem viewing the lectures, where I click to hear the lecture appears an advert clip and when I click it , it open the advert page. I even tried paper f 8 it is the same. Thanks .

  2. avatar says

    Dear admin,

    I must say that you guys are doing an amazing job with all the material and the on lectures. However, I am facing difficulties accessing the lectures using my mobile/tablet (samsung Galaxy S4/ Note 2) and wanted to know if you are aware of fix?

    I’ve tried using chrome, but still I’m not able to view the lectures (even when signed in).

  3. avatar says

    Dear Mike,

    Thank you so much for these lectures, it really made my ACCA self study more interesting and enjoyable.

    I have a question in relation to borrowing cost, what happens if the borrowed finance is repaid before the project is complete, do we keep capitalising borrowed cost until the project is completed or capitalise until its repaid?

    Thank you

  4. avatar says

    My name is Alicia.

    I don’t understand one thing, calculating the temporary investment of surplus funds of 90 mlns (from 31. August till 1.11). This was calculated for two months, which I understand as then there was a strike. But why we didn’t add another 2 months when the work resumed from 1.1 until completion 2 months later. We did it for borrowed costs why not for invested? Didn’t we earn any invested income during this time?

    • Profile photo of nkmile64 says

      Well I think that with this kind of problems it’s better trying to establish the logical sequence of events first.
      So, by 1 Sep ’08 the entity has received the whole $300m loan from the bank and at the same time $90m out of this sum are temporarily invested ,in another bank I suppose, earning a 5% interest p.a.
      For the whole of Sep and Oct (2 months) the borrowing costs eligible for capitalisation will be the actual borrowing costs incurred less the matching investing income, in accordance with IAS 23.
      When the work resumed on 1 Jan ’09 the question states and I quote “the entity spent the rest of the loan in completing the project”, which means (remember it could not get any more money from the borrowing bank) it withdrew the $90m from the investing bank and spent them in construction; that’s is why we didn’t earn any investment income for the period 1Jan ’09 – 28 Feb ’09 : there was nothing to invest!

      Yet, there is still a problem of how to treat the investment income earned in the period 1 Nov ’09 – 31 Dec ’09 i.e. the period of the workers’ strike. Should we keep on deducting this income from the the capitalised aggregate sum while at the same time there wouldn’t be any matching costs? According to IAS 23 during an extended period in which an entity suspends activities relating to the asset construction, the borrowing costs incurred should be treated as costs of holding PARTIALLY COMPLETED assets and thus would not qualify for capitalisation. I assume that this refers to the temporary investment as well but I an not certain and I would appreciate the tutor’s assistance on this.

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