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I have a question:
If an entity borrows money from a related company to acquire a subsidiary. Can the costs be capitalised?
Or i borrowed money from a third party?
Now: if athe company X acquired company Y ( subsidiary) where company Y has an investment property. Can company X capitalise expenses occured to its asset (subsidiary) for the investment property?
Hi,
If you mean interest/borrowing costs as the costs capitalised then no they cannot be capitalised. The borrowing costs can only be capitalised if the funds are used for a qualifying asset and the acquisition is not a qualifying asset. This is the case too even if the borrowings are from a third party.
Thanks
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