Mike, could you, please, advise me on how we should treat intercompany borrowings when they are directly incurred on a 'qualifying asset'? is there any PUP or something we exclude somewhere in FS in this case?
Ask the Tutor ACCA FR
capitalisation of intercompany borriwings
10y ago#1Assuming that both separate companies have correctly accounted for the loan interest receivable and finance charges (loan interest payable), the issue comes down to what happens on consolidation
I've never come across this before but my intuition takes me along the lines of:
Dr Loan interest received / receivable
Cr TNCA (in so far as the borrowing costs have been capitalised)
Cr Finance charges (in so far as some borrowing costs may not have been capitalised)
I think that would do it!
makes sense to me. thanks a lot!
10y ago#3You're welcome
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