Under Australian Accounting Standard AASB 123,borrowing costs relating to the construction of an asset should cease to be recognised as part of the cost of that asset when:

Question

Quizplus · Accepted Answer

According to AASB 123, borrowing costs related to the construction of an asset should cease to be recognised as part of the cost of that asset when the asset is substantially ready for its intended use or sale. This means that borrowing costs should be capitalized up to the point when the asset is almost complete and ready for its intended purpose. Once the asset is substantially ready for its intended use, borrowing costs should not be recognised as part of the cost of the asset. Hence, option A is the best choice.

Under Australian Accounting Standard AASB 123,borrowing Costs Relating to the Construction