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Telefix; A famous telecom company, has recently acquired the license of 4G network technology. Furthermore, the company has an option to sell this license or licensed it to a third party. However, the management of the Telefix has decided to use it to operate a wireless network. Development process of the network started when the license is acquired. Should the borrowing costs on the acquisition of this 4G license be capitalized by the Telefix or should it wait until the network is ready for its intended use?
Jawad Constructors Private Ltd., a real estate company, has recently incurred expenses for the acquisition of a legal permit. This permit is especially obtained, which will allow them, to construct of a building. It has also acquired some other construction equipment that will be used in the construction process of various buildings. You have to guide the company that whether they can capitalize the borrowing costs incurred on the acquisition of the permit and other constructive equipment or they should wait until the construction of the building is complete?
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