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Dear Sir/Madam, I have a question in the field of accounting regarding the capitalization of borowing...

Dear Sir/Madam,

I have a question in the field of accounting regarding the capitalization of borowing costs related to the acquisition of an asset (IAS Accounting Standard 23).

More concretely, I would like to know why, when calculating the amount to capitalize we use a weighted factor regarding the outstanding time to complete the contract/year. For example, if a building is constructed during 2015 and there are two payments, one in the beginning and one at the end of the year, why do we capitalize the full borrowing costs related to the first payment (12/12 months), but do not capitalize any costs for the payment on the 31st of december (0/12 months)?

Thanks

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ekkarill92 answered 2 years ago
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