CERTYNEX IFRS ACADEMY

Work on a bridge is slowed for 3 weeks by a river flood, a temporary event inherent in this type of project (case data). Work then resumes normally. What is the effect on the capitalisation of borrowing costs?

Capitalisation is suspended for the 3 weeks, because active development is slowed.

Capitalisation continues: a temporary delay inherent in the preparation process does not suspend it.

Capitalisation is suspended as soon as the delay exceeds one week, a threshold the standard sets for construction projects.

Capitalisation ceases permanently, because the delay calls the completion of the asset into question.