Capitalisation of borrowing cost on land

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Pieter van der Zwan

IAS 23 prescribes when borrowing costs incurred in respect of a qualifying asset must be capitalised to the cost of the asset. An important element of this determination is the timing when the capitalisation of borrowing cost commences or ceases. The IFRIC Interpretation Committee issued an agenda decision that provides some guidance on the timing when capitalisation of borrowing cost in respect of land should cease if a building is being constructed on such land.

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