How Should Borrowing Costs Relating to an Asset Being Constructed

question 2

Multiple Choice

How should borrowing costs relating to an asset being constructed over a substantial period of time be treated in the accounts?

• A) expensed as incurred
• B) capitalised and amortised over the period of the construction of the asset
• C) accrued and amortised over the period of the loan
• D) capitalised as part of the cost of the asset