IAS 23 requires an entity to capitalize borrowing costs incurred during the acquisition, construction or production of qualifying assets as part of the cost of those assets.

Question

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IAS 23 mandates that borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets, which necessarily take a substantial period of time to get ready for their intended use or sale, should be capitalized as part of the cost of the assets.

IAS 23 Requires an Entity to Capitalize Borrowing Costs Incurred