please help me to solve this problem.. I\'m not sure whether below datas are nee

Question

please help me to solve this problem..

I'm not sure whether below datas are need it to solve

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ATTN's Notes: During Year 4 ATTN hired a construction company to build a new office building. The construction project was started at the beginning of fact, the company was able to begin moving furniture into the new office on December 30, Year 4. The company carefully followed U.S. GAAP procedures to capitalize the avoidable interest on the building After construction, ATTN decided that the building had no salvage value and would last for 15 years March and was substantially finished by the end of the year. In With a possible transition from U.S. GAAP to IFRS looming, ATTN's management team feels that this is the perfect opportunity to see what the change in GAAP will do to their financial statements. They have asked the acounting team to recalculate the capitalized interest (and any transactions based on that capitalization) following IFRS principles. Using the infomation below, determine the journal entry that would be necessary if ATTN were to switch from the U.S. GAAP method of capitalizing interest to the IFRS method at the end of Year5 NOTE: While I want you to update the FSs for this adjustment, it would not affect taxes since itis only a whatif entry Payments to the construction company Date Amount $401,531 $73,006 $146,011 $109,508 $730,056 6-2 7-16 Principal Interest Rate Outstanding debt, Year 4 Loans Payable Notes Payable Construction Note Payable $640,400 $851,732 $365,028 2 3.50% 5.00%

Explanation / Answer

As per US GAAP Interest on Building Shall be capitalised to cost of Building where as in case of IFRS only Interest costs in respect of Qualifying Asset shall be capitalised,

In the given case building construction started in the beginning of March and completed by year ended Dec therefore building doesnot take substantial time to complete construction.Hence it is not a qualifying asset

So Interest shall be charged to Profit and Loss account which come as Adjustments between US GAAP and IFRS

Finally as per IFRS Interest booking as Expense will have Tax savings

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