Question
Construction of BB block by KK Limited began on 1 April 2016. The following costs were incurred on the construction: GHe Freehold land Architect
Construction of BB block by KK Limited began on 1 April 2016. The following costs were incurred on the construction: GHe Freehold land Architect fees Site preparation General overheads Price list of Materials purchased Discount on materials Direct labour costs Legal fees . 4,500,000 620,000 1,650,000 940,000 7,800,000 10% 11,200,000 2,400,000 KK secured a loan of GHC25m on 1st April 2016 to finance the construction of the new store (which meets the definition of a qualifying asset per IAS 23). The loan carried an interest rate of 8% per annum and is repayable on 1st April 2017. The block was completed on 1 January 2017 and brought into use following its grand opening on the 1st April 2017. Required: Calculate the amount to be included as property, plant and equipment in respect of the new store for the year ended 31st March 2017 in accordance with IAS 16
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