Recognition and presentation of long-lived assets

MF Order no.2649 of 28 September 2023 on the amendment and completion of certain accounting regulations brings new details on the recognition and presentation of long-lived assets, namely:

– An asset is normally ready for its intended use when the physical construction of the asset is completed, even though some routine administrative work may still continue. If only minor modifications, such as the interior decoration of a building according to the purchaser’s or user’s specifications, are still to be carried out, then most of the work is considered to have been completed.

– Entities that have included in the value of long-lived assets borrowing costs disclose appropriate information in the notes to the financial statements

The date of commencement of capitalisation of borrowing costs as part of the cost of a long-lived asset is the date on which the entity first meets all the conditions below:

a) it incurs expenditure on that asset;

b) it incurs borrowing costs; and

c) undertakes the activities necessary to prepare the asset for its intended use.

For the purposes of these Regulations, an entity incurs expenditure on a long-lived asset only when that expenditure has resulted in cash payments, transfers of other assets or the incurrence of interest-bearing liabilities.