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borrowing costs

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › borrowing costs

  • This topic has 6 replies, 4 voices, and was last updated 14 years ago by MikeLittle.
Viewing 7 posts - 1 through 7 (of 7 total)
  • Author
    Posts
  • January 20, 2011 at 12:04 pm #47215
    nz
    Member
    • Topics: 2
    • Replies: 6
    • ☆

    what is capitalization rate?
    what is the formula?

    February 1, 2011 at 1:18 pm #76501
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23315
    • ☆☆☆☆☆

    Where have you read the expression? If it’s what I think you mean, it’s the amount ( rather than a rate ) which has been capitalised in the year – for disclosure purposes

    March 25, 2011 at 10:46 am #76502
    nz
    Member
    • Topics: 2
    • Replies: 6
    • ☆

    capitalisation rate! In IAS 23, Borrowing costs. Were u have to use weighted average to calculate the rate.

    March 25, 2011 at 6:28 pm #76503
    salu007
    Member
    • Topics: 58
    • Replies: 32
    • ☆☆

    Hi Naomi,

    If you have studied F9 or P4 the formula you are talking about is the formula of WACC (Weighted average cost of capital put in the values and you will get the answer.

    Mike Sir,

    If i am wrong please correct me

    March 26, 2011 at 1:46 pm #76504
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23315
    • ☆☆☆☆☆

    I believe that salu is correct. There was a borrowing cost question asked within the last 12 months – can’t remember if it was F7 or P2. Why not check that out and see what the financial reporting examiners ask in a “normal” borrowing cost question?

    April 12, 2011 at 4:13 pm #76505
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 1
    • ☆

    Hi
    I would like to know if borrowing cost MUST be capitalised, or its up to the company to decide whether to expense or capitalise

    April 13, 2011 at 5:15 pm #76506
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23315
    • ☆☆☆☆☆

    Hi

    My understanding is that, since its most recent revision, where borrowing costs satisfy the definition and IAS criteria, then the borrowing costs MUST be capitalised

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