AC2101 S1 2014 Seminar 19 Revenue

AC2101 S1 2014 Seminar 19 Revenue - AC2101 Accounting...

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1 AC2101 – Accounting Recognition and Measurement Anil J N Shukla Adjunct Associate Professor Semester’1’2013-14’ presented by Seminar 19 Construction Contracts (Cont.) * Continue’with’construction’contract’accounting’and’its’ applications’ * INT’FRS’115’&’Accompanying’Note’ 2 Seminar’19’Agenda’
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2 § Borrowing’costs’ Ø …’interest’and’other’costs’incurred’in’connection’with’the’ borrowing’of’funds’ § FRS’23’(2009) Ø Supersedes’FRS’23’(2003)’e±ective’1’Jan’2009 A’related’issue…Borrowing’Costs’ 3’ § Previously,’under’ FRS’23’(2003) ,’borrowing’costs’of’ funds’for’ a. Acquisition/construction’of’long-live’asset’ Ø Capitalized’OR’e xpensed’when’incurred’ b. Operation’ Ø Expensed’when’incurred ’ Superseded’FRS’23’(2003) ’ 4’
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3 § Borrowing’costs’incurred’ directly ’in’respect’of’ acquisition,’construction’or’production’ of’a’ qualifying’asset’ should’be’ capitalized ’as’part’of’the’ cost’of’that’asset’ § Other’borrowing’costs’ should’be’ expensed ’when’ incurred’ FRS’23’(2009)’ FRS23:8 5’ § Qualifying’asset’ =’asset’that’necessarily’takes’a’ substantial’period’of’time’ to’get’ready’for’its’ intended’use’or’sale’ § Depending’on’the’circumstances,’any’of’the’ following’may’be’qualifying’assets:’ § Inventory,’manufacturing’plants,’power’generation’ facilities,’intangible’assets,’investment’properties’ FRS’23’(2009)’ FRS23:5 6’ FRS23:7
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4 § Illustration’2’ Ø Interest’Costs’–’ Capitalised?’
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AC2101 S1 2014 Seminar 19 Revenue - AC2101 Accounting...

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