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The entity took out
a loan from a bank to finance the purchase. Under IFRS,
what is the proper accounting treatment for the freight and
interest costs related to the machinery purchase?
a. The freight and interest costs should be
immediately expensed.
b. The freight and interest costs should be
capitalized as part of property, plant and
equipment.
c. The interest cost should be capitalized as part of
property, plant and equipment, and the freight
cost should be immediately expensed.
d. The freight cost should be capitalized as part of
property, plant and equipment, and the interest
cost should be immediately expensed.
