ACCA AAA ^INT Syllabus D. Audit of Historical Financial Information - Non Current Assets - Cost - Notes ^{2 / 41}

Costs to include are:

• All directly attributable costs (e.g. P&P)

• All future OBLIGATED costs (at Present value)

• Borrowing costs (if takes a reasonable length of time to construct)

Future obligated costs

Dr Cost
Cr Liability

• The liability must then be unwound

• Dr Interest (I/S)
  Cr Liability

Auditing PPE additions

1. A breakdown of the components of the amount capitalised costs  to ensure all items are eligible for capitalisation.

2. Agreement of a sample of the capitalised costs to supporting documentation

3. A copy of the approved budget for any capital expenditure plan

4. Documentation to verify when constructed assets are complete and ready for use

5. Recalculation of the borrowing cost, depreciation charge and carrying value of the extension at the year end, and agreement of all figures to the draft financial statements

6. Confirmation that the additions to PPE are disclosed in the required note to the financial statements