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borrowing cost

This topic has 2 replies, 2 voices, and was last updated 2 months ago by P2-D2.

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September 8, 2024 at 10:08 am #710962
kennigara
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when we capitalise borrowing cost what is journal entry of credit side is credit side will be finane cost?
DR PPE
CR Finance cost
September 8, 2024 at 11:04 am #710967
kennigara
Participant
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when we expense the p/l what what will be then the journal entry?
September 11, 2024 at 9:31 pm #711340
P2-D2
Keymaster
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Hi,
The loan on which the borrowing costs relate to will be held under amortised cost. Under amortised cost the finance cost is accounted for by DR Finance Cost CR Loan. When capitalising the borrowing costs the DR is taken to PPE as opposed to finance costs.
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