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Hello open tuition, well done.
If there’s a delay to commence construction of a qualifying asset and the delay was due to delay in approval of the plan by government. Do you capitalise during this period?
If the qualifying asset is in progress, what can be it’s valuation at a year end date? Is it the initial cost of the asset + the borrowing costs incurred to date???.Thanks opentuition
Hi,
If there is delay in the construction then we do not capitalise as we would not be constructing the asset. There is no guarantee that the approval will be granted so it is not prudent to capitalise.
Yes, the value is the cost plus borrowing costs capitalised to date.
Tanks
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