Real Estate
Capitalized Borrowing Costs — Construction Loan (IAS 23)
Adding monthly interest on a construction loan to the CIP asset during the build period.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Construction in Progress (CIP) | Asset (+) | 8,000.00 | - |
| Interest Payable / Cash | Liability/Asset (-) | - | 8,000.00 |
💡 Accountant's Note
Under IAS 23, interest on borrowings specifically used to finance a 'qualifying asset' (a building under construction) must be capitalized, not expensed, until the asset is ready for use.
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