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Which qualitative characteristic is applied by IAS 23 Borrowing Costs to the capitalisation of borrowing costs?
A.Consistency
B.Timeliness
C.Materiality
D.UnderstandabilityThe correct answer as per ACCA study hub is A. However I don’t understand how it’s A and not B. Kindly explain the reason Sir.
We are ensuring that there is a consistent approach to the treatment of the interest incurred on borrowings. We aren’t applying timeliness as this is more in relation to where users need to know of an important issue that might impact their understanding/decisions such as in IFRS 5.
Thanks
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