Net borrowing costs.

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August 1, 2021 at 3:59 am #629979
7fsa
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Dear Chris,

I hope you are safe and well,
In regards to illustration of net borrowing costs which mentioned in Opentuition notes.
You calculated the investment income for just 3 months why not 4 months since there is no relation to interest income and labour strike?.
Could you explain why?

Thank you in advance.
August 1, 2021 at 9:48 am #630012
P2-D2
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Hi,

You cannot net the investment income off as part of the borrowing costs when there is strike action as there is no construction taking place. It will just be taken through profit or loss as normal.

Thanks
August 2, 2021 at 3:15 am #630078
7fsa
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Do you mean that to be able to net investment income of as a part of borrowing cost must be the same number of months. Is that right?
And regarding the fourth month or the month which labour strike has been made the investment income in that month will go directly to profit or loss statement.
Is that right, Sir?
August 8, 2021 at 10:10 am #630742
P2-D2
Keymaster
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Yes, if you have capitalised the interest for say 7 months then you can only net off the investment income for the same seven months.

Yes again, if it is not capitalised or net-off then it will got through profit or loss as normal.

Thanks and top work.
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