Greetings Sir,
I have a question:
In case of specific borrowing, if there is a situation where some amount the loan is not utilized for construction of qualifying asset. Should the interest on such unutilized part be charged to Profit or Loss or capitalized ?
For eg:
Loan : 100 mil.
Interest: 10 mil.
Unutilized Loan: 20 mil.
Investment Income: 60,000
whether the interest on 20 Mil. should be expensed?
And what will be the treatment of investment income?
Thanks.
Ask the Tutor ACCA SBR
Borrowing Cost- Specific Borrowing
6y ago#1This is probably more relevant to FR than SBR.
I would only capitalise interest on the utilised part of the loan. I would expense the rest.
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