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Dear Sir,
Hope you are fine and all is well !
I am getting confused a little bit with the above mentioned standards…The entity which has a construction contract with the contractor. How would it account for the partially completed assets at the end of accounting period ? Would it account as per IAS 16 ?? Lets say it has paid already $ 700M out of total fixed price contract of $1200M. The contractor has progress billing system in place
Another question is, if it will account as per IAS 16, Can we allowed to capitalize borrowing costs as per IAS 23 ?? Do you think this practically it is doable ??
Thanks
Capitalisation of borrowing costs? Yes, absolutely!
Accounting for payments whilst work is still progressing? Dr TNCA, Cr Cash
But don’t start depreciating until the building is completed and in use
Ok?
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