Question: QUESTION 2 (20 marks) Green Peace (Pty) Ltd is a company with a 31 December year-end. On 5 February 2022, the company borrowed money from

QUESTION 2 (20 marks) Green Peace (Pty) Ltd is a company with a 31 December year-end. On 5 February 2022, the company borrowed money from its bank to specifically fund the construction of a storage facility. Green Peace (Pty) Ltd purchased a piece of land for R550 000. The R550 000 was paid to the attorneys on 15 February 2022, and the final transfer of ownership passed to Green Peace (Pty) Ltd on 1 March 2022. An architect was hired on 5 April 2022 to design the storage facility, the architect was paid a deposit of R10 000 on 5 April 2022. The plans were completed on 31 May 2022 and submitted to the local municipality for approval. The municipality indicated that the plans would take up to three months to be approved. Based on the timeline set by the municipality, Green Peace (Pty) Ltd contracted a construction company to start construction of the storage facility on 1 September 2022. Green Peace (Pty) Ltd had to pay the construction company a deposit of R250 000. Green Peace (Pty) Ltd estimates that the storage facilitys construction will take 14 months once started.

REQUIRED:

With reference to the requirements of IAS 23, advise Green Peace (Pty) Ltd on the commencement, suspension, and cessation of capitalisation of borrowing costs in relation to the piece of land and construction of the storage facility. (20 marks)

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