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WorkpaperIAS 23 — Borrowing CostsL2 · L3 · L4

Capitalisation timeline file: start, suspension and end

2 missions9 sections to document60 min

Prepared by: AI-assisted draft
Reviewed by: Not reviewed — human review required
Status: Published

Objective of the workpaper

For each asset under construction, describe the site, enter the expenditure, the progress payments and grants received, the duration between the start and the end of inclusion and the duration of extended suspensions, then compute the eligible expenditure and the inclusion period. Assess each interruption (extended suspension or temporary delay, substantial work) and the completion date. The borrowing costs of each phase come from the loan statement (a datum of the file).

9 sections · 27 blocks · 2 calculations · 4 entries

IAS 23 §17
IAS 23 §18
IAS 23 §19
IAS 23 §20
IAS 23 §21
IAS 23 §22
IAS 23 §23
IAS 23 §24
IAS 23 §25

Work this workpaper as a mission

Each case that uses this template opens in the mission workspace: data, analysis, calculation, entries, conclusion and review, with your progress saved.

2 instances from the cases: the calculations and entries below are run by the calculation engine.

File and entity

Construction site: start, extended interruption, temporary delays and end of inclusion

Case tasks documented here

Do the interruption from June to August and the delay in October suspend inclusion? Justify.
On what date does inclusion end and what about the annex completed on 31 October? Justify.
Compute the eligible expenditure.
Compute the inclusion period.
Record the borrowing costs by phase and the placing in service.

Inputs

Construction site: schedule, event log and notice of acceptance of the works
Text
USINE_ET_ANNEXE_FINANCEES_PAR_UN_EMPRUNT_SPECIFIQUE
Cash paid on the asset
Number
2,600,000
Other assets transferred for the asset
Number
150,000
Interest-bearing liabilities assumed for the asset
Number
250,000
Progress payments received for the asset
Number
Grants received for the asset
Number
Duration between the start and the end of inclusion (months)
Number
10 months
Duration of extended suspension periods (months)
Number
3 months
Borrowing costs of the first inclusion phase (statement by phase)
Number
60,000
Borrowing costs of the second inclusion phase (statement by phase)
Number
45,000
Borrowing costs of the suspension period (expensed)
Number
45,000
Cumulative cost of the asset under construction at completion (ledger)
Number
3,105,000

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Analysis

IAS 23 §17IAS 23 §18IAS 23 §19IAS 23 §20IAS 23 §21IAS 23 §22IAS 23 §23IAS 23 §24IAS 23 §25

Points reviewed: start, expenditure, land, suspension, end, parts
ChecklistRequired
- Three conditions for the start of inclusion checked
- Eligible expenditure computed net of progress payments and grants
- Land without development activity set aside
- Extended interruption and exceptions assessed
- Substantial completion assessed
- Asset completed in parts assessed

Calculations

IAS 23 §17IAS 23 §18IAS 23 §19IAS 23 §20IAS 23 §21IAS 23 §22IAS 23 §23IAS 23 §24IAS 23 §25

Eligible expenditure = cash + assets transferred + interest-bearing liabilities − progress payments − grants
Calculation
3,000,000
Cash paid on the asset ; Other assets transferred for the asset ; Interest-bearing liabilities assumed for the asset ; − Progress payments received for the asset ; − Grants received for the asset
Inclusion period = duration from start to end − extended suspension
Calculation
7 months
Duration between the start and the end of inclusion (months) ; − Duration of extended suspension periods (months)

Journal entries

Entries

Borrowing costs included (first phase)
Entry
Account Debit Credit
Asset under construction 60,000
Interest payable 60,000
Borrowing costs included (second phase)
Entry
Account Debit Credit
Asset under construction 45,000
Interest payable 45,000
Borrowing costs of the suspension, expensed
Entry
Account Debit Credit
Interest expense 45,000
Interest payable 45,000
Placed in service: transfer of the cumulative cost
Entry
Account Debit Credit
Property, plant and equipment 3,105,000
Asset under construction 3,105,000

Account	Debit	Credit
Asset under construction	60,000
Interest payable		60,000

Account	Debit	Credit
Asset under construction	45,000
Interest payable		45,000

Account	Debit	Credit
Interest expense	45,000
Interest payable		45,000

Account	Debit	Credit
Property, plant and equipment	3,105,000
Asset under construction		3,105,000

Judgements

Judgment

IAS 23 §17IAS 23 §18IAS 23 §19IAS 23 §20IAS 23 §21IAS 23 §22IAS 23 §23IAS 23 §24IAS 23 §25

Interruption: extended suspension or temporary delay
JudgmentRequired
Extended suspension of active development
Extended suspension of active development / Temporary delay inherent in the process / Substantial technical and administrative work in progress
Rule and cross-reference: inclusion is suspended during extended periods in which active development is interrupted (IAS 23, para. 20); it is not suspended for substantial technical and administrative work or for a temporary delay inherent in the process of getting the asset ready (IAS 23, para. 21).
Rationale: duration, nature of the work during the interruption, cause
TextRequired
Completion of the asset
JudgmentRequired
Substantially all activities completed
Substantially all activities completed / Necessary activities not completed
Rule and cross-reference: inclusion ends when substantially all the activities necessary to prepare the asset for its intended use or sale are complete (IAS 23, para. 22).
Rationale: end date adopted and remaining activities
TextRequired

Conclusion

Dated timeline, costs included and transfer submitted to the reviewer
ConclusionRequired

Effect on the financial statements

FS impact

Effect of the entries, line by line (derived from the entries)
Table

Normative references

References

Paragraphs cited in this workpaper and their verification status
References

Checks and financial statement impact

Suspension assessed and justifiedPass
Completion date justifiedPass
Transfer entry balancedPass

Assets: 105,000
Liabilities: 150,000
Profit or loss: -45,000
OCI: 0
Equity: -45,000

File and entity

File of a capitalised project: capitalisation of borrowing costs, suspension, placing in service and interaction with an asset grant

Case tasks documented here

What information is missing to settle the end date of inclusion for the kiln?
Does the two-month interruption suspend inclusion for the kiln? Justify.
Compute the eligible expenditure of the kiln, net of the grant.
Compute the inclusion period of the kiln.
On what date does inclusion end for the kiln? Justify.

Inputs

Construction site: schedule, event log and notice of acceptance of the works
Text
FOUR_CERAMIQUE_AVEC_INTERRUPTION_DE_DEUX_MOIS
Cash paid on the asset
Number
2,100,000
Other assets transferred for the asset
Number
100,000
Interest-bearing liabilities assumed for the asset
Number
Progress payments received for the asset
Number
Grants received for the asset
Number
300,000
Duration between the start and the end of inclusion (months)
Number
10 months
Duration of extended suspension periods (months)
Number
2 months
Borrowing costs of the first inclusion phase (statement by phase)
Number
Borrowing costs of the second inclusion phase (statement by phase)
Number
Borrowing costs of the suspension period (expensed)
Number
Cumulative cost of the asset under construction at completion (ledger)
Number

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Analysis

IAS 23 §17IAS 23 §18IAS 23 §19IAS 23 §20IAS 23 §21IAS 23 §22IAS 23 §23IAS 23 §24IAS 23 §25

Points reviewed: start, expenditure, land, suspension, end, parts
ChecklistRequired
- Three conditions for the start of inclusion checked
- Eligible expenditure computed net of progress payments and grants
- Land without development activity set aside
- Extended interruption and exceptions assessed
- Substantial completion assessed
- Asset completed in parts assessed

Calculations

IAS 23 §17IAS 23 §18IAS 23 §19IAS 23 §20IAS 23 §21IAS 23 §22IAS 23 §23IAS 23 §24IAS 23 §25

Eligible expenditure = cash + assets transferred + interest-bearing liabilities − progress payments − grants
Calculation
1,900,000
Cash paid on the asset ; Other assets transferred for the asset ; Interest-bearing liabilities assumed for the asset ; − Progress payments received for the asset ; − Grants received for the asset
Inclusion period = duration from start to end − extended suspension
Calculation
8 months
Duration between the start and the end of inclusion (months) ; − Duration of extended suspension periods (months)

Journal entries

Entries

Borrowing costs included (first phase)
Entry
Debit Asset under construction ← Borrowing costs of the first inclusion phase (statement by phase) ; Credit Interest payable ← Borrowing costs of the first inclusion phase (statement by phase)
Borrowing costs included (second phase)
Entry
Debit Asset under construction ← Borrowing costs of the second inclusion phase (statement by phase) ; Credit Interest payable ← Borrowing costs of the second inclusion phase (statement by phase)
Borrowing costs of the suspension, expensed
Entry
Debit Interest expense ← Borrowing costs of the suspension period (expensed) ; Credit Interest payable ← Borrowing costs of the suspension period (expensed)
Placed in service: transfer of the cumulative cost
Entry
Debit Property, plant and equipment ← Cumulative cost of the asset under construction at completion (ledger) ; Credit Asset under construction ← Cumulative cost of the asset under construction at completion (ledger)

Judgements

Judgment

IAS 23 §17IAS 23 §18IAS 23 §19IAS 23 §20IAS 23 §21IAS 23 §22IAS 23 §23IAS 23 §24IAS 23 §25

Interruption: extended suspension or temporary delay
JudgmentRequired
Extended suspension of active development
Extended suspension of active development / Temporary delay inherent in the process / Substantial technical and administrative work in progress
Rule and cross-reference: inclusion is suspended during extended periods in which active development is interrupted (IAS 23, para. 20); it is not suspended for substantial technical and administrative work or for a temporary delay inherent in the process of getting the asset ready (IAS 23, para. 21).
Rationale: duration, nature of the work during the interruption, cause
TextRequired
Completion of the asset
JudgmentRequired
Substantially all activities completed
Substantially all activities completed / Necessary activities not completed
Rule and cross-reference: inclusion ends when substantially all the activities necessary to prepare the asset for its intended use or sale are complete (IAS 23, para. 22).
Rationale: end date adopted and remaining activities
TextRequired

Conclusion

Dated timeline, costs included and transfer submitted to the reviewer
ConclusionRequired

Effect on the financial statements

FS impact

Effect of the entries, line by line (derived from the entries)
Table

Normative references

References

Paragraphs cited in this workpaper and their verification status
References

Checks and financial statement impact

Suspension assessed and justifiedPass
Completion date justifiedPass
Transfer entry balancedNot evaluated

Assets: 0
Liabilities: 0
Profit or loss: 0
OCI: 0
Equity: 0

Inputs

Construction site: schedule, event log and notice of acceptance of the works
Text
Cash paid on the asset
Number
Other assets transferred for the asset
Number
Interest-bearing liabilities assumed for the asset
Number
Progress payments received for the asset
Number
Grants received for the asset
Number
Duration between the start and the end of inclusion (months)
Number
Duration of extended suspension periods (months)
Number
Borrowing costs of the first inclusion phase (statement by phase)
Number
Borrowing costs of the second inclusion phase (statement by phase)
Number
Borrowing costs of the suspension period (expensed)
Number
Cumulative cost of the asset under construction at completion (ledger)
Number

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Analysis

IAS 23 §17IAS 23 §18IAS 23 §19IAS 23 §20IAS 23 §21IAS 23 §22IAS 23 §23IAS 23 §24IAS 23 §25

Points reviewed: start, expenditure, land, suspension, end, parts
ChecklistRequired
- Three conditions for the start of inclusion checked
- Eligible expenditure computed net of progress payments and grants
- Land without development activity set aside
- Extended interruption and exceptions assessed
- Substantial completion assessed
- Asset completed in parts assessed

Calculations

IAS 23 §17IAS 23 §18IAS 23 §19IAS 23 §20IAS 23 §21IAS 23 §22IAS 23 §23IAS 23 §24IAS 23 §25

Eligible expenditure = cash + assets transferred + interest-bearing liabilities − progress payments − grants
Calculation
Cash paid on the asset ; Other assets transferred for the asset ; Interest-bearing liabilities assumed for the asset ; − Progress payments received for the asset ; − Grants received for the asset
Inclusion period = duration from start to end − extended suspension
Calculation
Duration between the start and the end of inclusion (months) ; − Duration of extended suspension periods (months)

Journal entries

Entries

Borrowing costs included (first phase)
Entry
Debit Asset under construction ← Borrowing costs of the first inclusion phase (statement by phase) ; Credit Interest payable ← Borrowing costs of the first inclusion phase (statement by phase)
Borrowing costs included (second phase)
Entry
Debit Asset under construction ← Borrowing costs of the second inclusion phase (statement by phase) ; Credit Interest payable ← Borrowing costs of the second inclusion phase (statement by phase)
Borrowing costs of the suspension, expensed
Entry
Debit Interest expense ← Borrowing costs of the suspension period (expensed) ; Credit Interest payable ← Borrowing costs of the suspension period (expensed)
Placed in service: transfer of the cumulative cost
Entry
Debit Property, plant and equipment ← Cumulative cost of the asset under construction at completion (ledger) ; Credit Asset under construction ← Cumulative cost of the asset under construction at completion (ledger)

Judgements

Judgment

IAS 23 §17IAS 23 §18IAS 23 §19IAS 23 §20IAS 23 §21IAS 23 §22IAS 23 §23IAS 23 §24IAS 23 §25

Interruption: extended suspension or temporary delay
JudgmentRequired
Extended suspension of active development / Temporary delay inherent in the process / Substantial technical and administrative work in progress
Rule and cross-reference: inclusion is suspended during extended periods in which active development is interrupted (IAS 23, para. 20); it is not suspended for substantial technical and administrative work or for a temporary delay inherent in the process of getting the asset ready (IAS 23, para. 21).
Rationale: duration, nature of the work during the interruption, cause
TextRequired
Completion of the asset
JudgmentRequired
Substantially all activities completed / Necessary activities not completed
Rule and cross-reference: inclusion ends when substantially all the activities necessary to prepare the asset for its intended use or sale are complete (IAS 23, para. 22).
Rationale: end date adopted and remaining activities
TextRequired

Conclusion

Dated timeline, costs included and transfer submitted to the reviewer
ConclusionRequired

Effect on the financial statements

FS impact

Effect of the entries, line by line (derived from the entries)
Table

Normative references

References

Paragraphs cited in this workpaper and their verification status
References