18 Questions
What is the functional currency in the given scenario?
Philippine peso
In the context provided, which item will be translated to the closing rate when preparing the statement of financial position?
Both a and b
Based on the exchange rates given, how much foreign exchange gain (loss) will be recognized on December 31, 20x1?
$200,000 loss
What is the cost of the building on initial recognition according to PAS 23?
₱7,000,000
Which of the following may not be considered a 'qualifying asset' under PAS 23?
An expensive private jet that can be purchased from a local vendor
What is the purpose of PAS 23?
To provide guidelines for capitalization of borrowing costs
What is the total defined benefit cost for 20x1 in Entity A's financial statement?
$468,000
What is the component of the total defined benefit cost that should be recognized in profit or loss?
$408,000
What is the net defined benefit liability (asset) in Entity A’s December 31, 20x0 statement of financial position?
$588,000 liability
Which component of the total defined benefit cost is to be recognized in other comprehensive income?
($180,000)
What is the net defined benefit liability (asset) in Entity A’s December 31, 20x1 statement of financial position?
$360,000 liability
How much was the return on plan assets for 20x1 in Entity A's financials?
$132,000
Which of the following best describes the treatment of interest cost incurred during the construction period for an asset financed with new borrowing?
Interest expense in the construction period.
Under PAS 23, which cost may not be eligible for capitalization as borrowing costs?
Imputed cost of equity.
When should the capitalization of borrowing costs be suspended?
Shall be suspended only during extended periods of delays in which active development is delayed.
What happens to the capitalization of borrowing costs during temporary periods of delay?
It shall be suspended during temporary periods of delay.
Which cost is generally not eligible for capitalization as borrowing costs under PAS 23?
Imputed cost of debt.
What is the correct treatment for exchange differences arising from foreign currency borrowings under PAS 23?
Treated as an adjustment to interest costs pertaining to a qualifying asset.
Test your knowledge on how interest cost incurred during the construction period for an asset financed with a new borrowing is accounted for. Determine whether it is part of the historical cost, interest expense, or deferred charge.
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