Which of the following statements regarding borrowing costs is correct?
A) Neither ASPE nor IFRS usually require disclosure of these items.
B) They are usually amortized until the majority of the underlying products have been sold.
C) They are usually treated as period costs if they are incurred to bring inventories to a condition ready for sale.
D) If interest is capitalized, ASPE requires this policy and the amount capitalized to be disclosed.

Question

Quizplus · Accepted Answer

ASPE requires disclosure of the policy and amount of interest capitalized if it is chosen as an accounting policy. Therefore, option D is correct. Options A, B, and C are incorrect as ASPE and IFRS both require disclosure of borrowing costs, they are typically not amortized until sales take place, and they are usually treated as inventory costs, not period costs.

Which of the Following Statements Regarding Borrowing Costs Is Correct