Page 9 - 2018 FAC4864 Test 4 slides - Borrowing Costs & IFRS 5

BORROWING COSTS

Other issues to consider

• Is it specific or general finance? (Refer IAS 23.12 and .14)

• When does capitalisation commence, and when does it
cease? (IAS 23.17 and .22)

• When should capitalisation be temporarily suspended? (IAS

23.20)

• What is the deferred tax effect? (Remember that for

taxation purposes, interests are deductible the moment the

asset is brought into use in terms of Section 11A dealing
with expenditure losses incurred before the
commencement of trade.

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