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When building a shop, I receive pro-forma invoice from the contractors for advance payment. I pay the supplier based on the pro-forma invoice.

Should I use the pro-forma invoice to capitalize it as a Fixed Assets as per IFRS? Or is a final invoice required?
in IAS 16 - Property, Plant and Equipment by

1 Answer

0 votes
You can recognize the fixed assets based on the payment on the per-forma invoice. In fact it should be accounted for as capital WIP.
IFRS can not answer the questions like supporting documents for capitalization. One has to the consider the transfer of Risk and test of economic benefits. For all practical reasons, it is advisable to capitalise on the basis of Tax Invoice.