CERTYNEX IFRS ACADEMY

An entity develops software over 24 months in the development phase, financed by a dedicated loan. What can be said about applying the borrowing costs standard to this project?

Intangible assets are outside the scope of the standard: the project's interest is therefore an expense.

The software is qualifying as soon as it is financed by a loan, whatever the development period.

Borrowing costs can be capitalised only after the software goes into production.

The software can be a qualifying asset, because it requires a substantial development period.