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Calculate the borrowing cost eligible for capitalization

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Reference no: EM132759580

Ahmed Limited has the following loans outstanding as at 1st January 2020:

  • Ahmed limited started construction of a new housing complex. The cost of construction will be $100,000,000. Ahmed will use the amounts from the above loans. Construction ended on August 31, 2020. Work was ceased from March 1, 2020 to April 30, 2020 due to labour strikes. The housing complex will be available for usage on December 31, 2020.

Required:

Problem 1: Calculate the borrowing cost eligible for capitalization as per IAS 23. Also show the cost of the housing complex as at December 31, 2020.

Reference no: EM132759580

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