Accounting · Borrowing Costs
Under IAS 23, a company is constructing a qualifying asset. Which of the following events would least likely require the suspension or cessation of the capitalisation of borrowing costs?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The physical construction of the asset is suspended for an extended period due to unexpected labor strikes or material shortages.
- 2Substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.
- 3Physical production is complete and only minor modifications or administrative tasks are being performed.
- 4The construction is temporarily delayed due to a common, predictable weather event or an unavoidable short-term technical delay while planning continues.✓
Correct answer
The construction is temporarily delayed due to a common, predictable weather event or an unavoidable short-term technical delay while planning continues.
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