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hello. according to Calibra Q 23 in Kaplan exam practice kit,
Borrowing cost is accounted to inventory in accordance with IAS 23.
My question is, how would it be accounted after the contract liability and revenue are all de/recognized ? Chris said it is matched with the revenue later but I could not know what such revenue means. Thx in advance.Revenue is on sale of IP
Please listen to my lecture at:
https://opentuition.com/acca/sbr/september-december-2020-acca-sbr-exam-sbr-revision-lectures/
It’s in Q2
Steve
Thx for reply. however perhaps I should have rephrased my words so it can get across more accurately. I was actually wondering why 510 + 540 in WIP just stays there, giving additional amount to the inventory. You said it would release in line with the other costs later so could you tell me the double entry for the release of such capitalized cost after the recognition of the revenue?
The costs are part of COS. The journals that you need are on the video.
Don’t forget that inventory is not part of double entry – the only journal at the year end is
Dr Inventory Cr COS
So, if you still have it – you do the above journal……and, if you don’t, you don’t do it.
If it helps look back at our bookkeeping notes in FA.
But don’t spend time on this…..as it wasn’t asked for in the question.
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