Asset completed in parts

Learning objectives

• Analyse the cessation of capitalisation for a part of an asset that can be used while construction continues on the other parts.L3
• Justify and defend in a professional file (L4) the treatment adopted for the "Assets completed in parts" concept, distinguishing the IFRS requirement, the case data, the teaching assumption and judgement.L4

Normative references

• IAS 23 §24Asset completed in parts, each part being capable of being used while construction continues on other parts: the entity ceases capitalising borrowing costs on a part when it completes substantially all the activities necessary to prepare that part for its intended use or sale.
• IAS 23 §25Examples: a business park comprising several buildings, each capable of being used separately (capitalisation ceases part by part); an industrial plant with several processes carried out in sequence at the same site, such as a steel mill, which must be completed in its entirety before any part can be used.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• When construction continues on other parts of an asset, capitalisation ceases for a part that is already complete and can be used separately.L3