IAS 23

A1) Expense A2) "...can I capitalised the subsidiary?" Can you capitalise the SUBSIDIARY?!!!!!! !No! (and nor can you capitalise the loan interest incurred when you borrowed the money to finance the purchase)

G'day Mike, With reference to Kat's Q1 & your A1, can I say that IAS 23 borrowing cost is only apply to own Asset under IAS 16 which take a substantial Period of time to get ready and does not apply to Acquired Asset? In another words, acquired of qualifying asset is not applicable? Furthermore, in regards to calculation of IAS 23, should the borrow cost (i.e finance cost) calculated as initial cost of asset using PVFCF [EIR x Cost x Months]? OR capitalized as and when borrow cost (finance cost) is incurred during the Qualifying period? OR both methods wrong? Seeking your advise on the above. Thanks!

It's capitalised as and when borrowing costs are incurred ..... and, even then, it's not ALL available for capitalising

G'day Mike, Thanks! Is the below presentation correct? SOFP as at 20X5 PPE 1000 SOFP as @ 20X6 PPE 1100 (plus borrowing cost $100). Entries to capitalise borrowing cost; Dr PPE. 100 Cr Bank. 100

Yes ......... except that there appears to be no work being carried on in the development, improvement, construction or acquisition of the qualifying asset and, if that assumption is correct, then no borrowing costs are available to be capitalised. So, no, it's not correct

G'day Mike, I like your reply.. it's really make me think hard. ^^ Well understood and thank you so much!

You're welcome