How Should the Cost of Borrowing Funds to Acquire or Construct

question 4

Multiple Choice

How should the cost of borrowing funds to acquire or construct property, plant, and equipment be accounted for under IASB rules, as revised in 2007?

• A) It should be expensed in the period incurred.
• B) It should be added to the other costs of acquiring fixed assets to determine the amount for the balance sheet.
• C) Both methods are acceptable.
• D) Neither method is acceptable under IASB rules.

---

Definitions:

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior, through which an association is made between a behavior and a consequence.

Classical Conditioning

Learning process in which a neutral stimulus becomes associated with an innately meaningful stimulus and acquires the capacity to elicit a similar response.

Latent Learning

Learning that occurs without becoming apparent in the learner's behavior until it is demonstrated under different conditions.

Discovery Learning

A method of inquiry-based instruction, cognitive theory, and problem-solving that involves exploration and discovery within the learning process.