Tipper Ltd. raised a $15 million loan having an interest rate of 13% on 1 January 2022.
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Question:
Required:
i. Explain when borrowing cost should be commenced and suspended under IAS 23. (4 marks)
ii. Compute the total borrowing cost for the year.
iii. Compute the borrowing cost to be capitalised and charged to profit & loss account.
iv. Compute the cost of the office building in the statement of financial position on
December 31, 2022.
B. You are also helping to make your organization's year-end financial statement and have been asked to carry out an impairment review of non-current assets held. You obtained the following details of an equipment held by the firm:
An equipment with a cost price of $1,000,000 was bought 2 years ago. It has a useful life of 10 years and 0 residual value. It is now being revalued after two years to fair value of $500,000 if sold on the second-hand market and there is no cost to sell. The value in use is $600,000.
Required:
Using clear workings, compute the impairment, if any, on the equipment.
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
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