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In example 4, chapter 10 (specific borrowing costs) the lecturer have capitalised borrowing costs over 9 months however the construction didn’t start until 01/03 assuming the borrowing was taken beginning of the year. Only 7 months to be capitalised and not from Jan. Please advise. On the note it mentioned the borrowing to be capitalised when the construction begins.
Please advise.
Hi,
The question should state that the year-end is 31 December, which I think it does in the video. Therefore there are 10 months from 1 March to 31 December and given there is not construction for one month (1 October to 1 November) then we capitalise 9 months.
Thanks
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