5 Cessation of capitalization
An entity shall cease capitalising borrowing costs when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.
Routine administrative work may still continue even after asset is complete for use or sale then capitalisation should stop. Also, minor adjustments or final touches might still be left to be done and asset is already ready for use or sale then capitalization must stop.
5.1 Assets consisting of different independent parts or levels
When an entity completes the construction of a qualifying asset in parts and each part is capable of being used while construction continues on other parts, the entity shall cease capitalising borrowing costs when it completes substantially all the activities necessary to prepare that part for its intended use or sale.
An entity shall disclose:
- the amount of borrowing costs capitalised during the period; and
- the capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation.