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II.
Would the power generation plant construction in three phases be considered as qualifying
asset under IAS 23, thereby making it possible for Magnificent Inc. to capitalize the
borrowing costs for Chinese Development Bank? If yes when should the capitalization of
borrowing costs start?
Would the shopping mall be considered a qualifying asset under the Standard? Would the
interest expense on the term loan borrowed for the construction of the shopping mall
qualify as eligible borrowing costs?
III.
Would the expensive cars purchased by the car dealership be considered qualifying assets
under the Standard, thereby making it possible for Magnificent Inc. to capitalize the
borrowing costs, which are substantial compared to the costs of the cars? Would borrowing
costs include guarantee commission paid to banks for arranging corporate guarantees in
addition to interest expense on bank loans?