Question: Financial reporting and analysis 3. Hars Plc will be constructing a building costing $100M and it uses IAS 23 alternative treatment of borrowed funds. They

Financial reporting and analysis 3. Hars Plc will be constructing a

Financial reporting and analysis

3. Hars Plc will be constructing a building costing $100M and it uses IAS 23 alternative treatment of borrowed funds. They took a loan of $80M specifically for this construction. The remainder will be taken from the general pool of funds. Their debt structure is as follows: A. What is the total borrowing cost to be capitalised? (8 marks) B. Calculate the interest expense which will be recognised in the Statement of Comprehensive Income at the end of the financial year. (4 marks)

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