Acorn Ltd had the following loans in place at the end of 2016: 1 Jan.2016 21 Dec. 2016 $m $m 10% Bank loan repayable in 2018 120 120 9.5% Bank loan repayable in 2019 80 80 8.9% Bank loan repayable in 2017 nil 150 The 8.9% loan was issued to fund the construction of a qualifying asset, a mining equipment, construction of which started on 1 July 2016. On 1 January 2016 the company began construction of a piece of hydroelectric plant using existing borrowing. Expenditure incurred and drawn for this construction was as follows: 1 January 2016 - $30m 1 October 2016 - $20m You are required to calculate the amount of borrowing costs to be capitalized for the hydroelectric plant for the year ended 31 December 2016.
Acorn Ltd had the following loans in place at the end of 2016:
1 Jan.2016 21 Dec. 2016
$m $m
10% Bank loan repayable in 2018 120 120
9.5% Bank loan repayable in 2019 80 80
8.9% Bank loan repayable in 2017 nil 150
The 8.9% loan was issued to fund the construction of a qualifying asset, a mining equipment, construction of which started on 1 July 2016.
On 1 January 2016 the company began construction of a piece of hydroelectric plant using existing borrowing. Expenditure incurred and drawn for this construction was as follows:
1 January 2016 - $30m
1 October 2016 - $20m
You are required to calculate the amount of borrowing costs to be capitalized for the hydroelectric plant for the year ended 31 December 2016.
Step by step
Solved in 2 steps with 3 images
