New processing area

Generally 1 mark for each matter/specific audit procedure:

Matters:

– Materiality calculation
– Borrowing costs are directly attributable to the asset
– Borrowing costs should be capitalised during period of construction
– Amounts are correctly capitalised
– Depreciate from September 2011 
– Additions to non-current assets should be disclosed in note

Evidence:

– Review of costs capitalised for eligibility
– Agreement of sample of costs to supporting documentation
– Copy of approved capital expenditure budget/discuss significant variances
– Agreement of loan details to loan documentation
– Recalculation of borrowing costs, depreciation, asset carrying value
– Confirmation of completeness of disclosure in notes to financial statements

Maximum marks 8