Construction of BB block by KK Limited began on 1 April 2016. The following costs were...

 

Transcribed Image Text:

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 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