Capitalisation begins when expenditure and borrowing costs are incurred and activities to prepare the asset have started, and ends when the asset is ready for use. Other borrowing costs are expensed as incurred.
Source: TMS 23
Related terms
Property, plant and equipmentPhysical assets used in the production of goods and services, for rental or for administrative purposes, and expected to be used for more than one period.Investment propertyLand and buildings held to earn rental income, for capital appreciation, or both.Exchange differencesThe difference arising from translating foreign-currency items at exchange rates on different dates.Accounting estimatesThe determination by management judgement of amounts that cannot be measured precisely, such as provisions, useful lives, expected credit losses and fair values.Accounting policiesThe specific principles, bases, conventions, rules and practices an entity applies in preparing its financial statements.Accrual basis of accountingThe principle of recording transactions as income, expenses, assets and liabilities in the period in which they occur, rather than when cash is received or paid.
Last updated: October 31, 2026 · This definition is for general information only.