Under IAS 23, when are borrowing costs capitalized? Select the best response.
When it is probable that they will result in future economic benefits to the entity and the costs can be measured reliably
When you cannot yet determine if the costs will result in future economic benefits to the entity and if they can be measured reliably.
When construction of the asset begins.
Never. All borrowing costs should be expensed as incurred.
According to IAS 23.14, borrowing costs should be capitalized when expenditures are being incurred, borrowing costs are being incurred, and activities that are necessary to prepare the asset for its intended use are in progress. Therefore, the correct answer is:
When construction of the asset begins.
