Hello
I want to understand why is the specific borrowing cost for an asset capitalised rather than expensed? What is the explanation behind it?
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Borrowing cost
4y ago#1Hi,
We capitalise costs that are directly attributable to the asset. The borrowing costs are directly attributable as without using the loan to construct the asset then we would not have incurred the costs, hence the borrowing costs are capitalised as opposed to being expensed.
Thanks
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