Page 8 - PowerPoint Presentation

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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