Dear Experts,

I would like to request for your opinion on IAS 23

Funds Borrowed $100 for construction projects
Int @5% p.a.

Out of above $100, kept in bank fixed deposits $80 and balance utilized for construction projects. Later on further $40 paid from FD for Construction projects.

Interest on $100 accounted as interest expense

Interest exepnses DEBIT

Lender A/C CREDIT

Interest on FD accounted as interest income

BANK A/C DEBIT
Interest Income A/C CREDIT

Interest on amount utilized on construction projcets from the date of borrowing till completion of projects accounted as under:

CIP A/C DEBIT
Interest expense A/C CREDIT

HEMANT

IAS 23 States, Borrowing cost should be capitalized net of investment income earned on idle funds.

Please give calculation of interest to be capitalized.