Hello Stephen,
Ive a question regarding ias 23.
Please assume the company has three qualifying assets: Factory A, Building B and Building C.
Once factory A is complete, but its specific loan remains outstanding, and the company is still constructing buildings B and C using general borrowings, should the loan originally taken for factory A now be included in the general borrowing pool when calculating the capitalisation rate for Buildings B and C? Or should all interest on that loan after Factory A’s completion be expensed in SPL?
I understood from the OT lectures that the interest should be expensed in SPL (once exp has finished on the assets has finished). However, I came across a IAS 23 para that seemed to suggest otherwise, so I wanted to confirm things.
Thank you.
