Cost And Management Accountant
129 Points
Joined December 2009
Dear,
These charges will be capitalised, since Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are included in the cost of that asset. Such borrowing costs are capitalised as part of the cost of the asset when it is probable that they will result in future economic benefits to the entity and the costs can be measured reliably.
If, However, Company has the policy to recognize these charges as revenue expense then please note that Standards always overrule company's policy, if there is a contradiction in between company's policy and standards then obviously company's policy should suitably be amended to make it in line with the applicable standard.
I hope it helps.
Regards,
Desperado.