During the year ended 31 December 2025, Earl Grey Co built a…
During the year ended 31 December 2025, Earl Grey Co built an extension to its head office. The costs associated with the construction of the head office extension are as follows: Land acquisition $10mFees for environmental certification and building permit $0.5mArchitect and engineer fees $1mConstruction materials and labor costs (including unused materials) $6.6m At 30 September 2025, the date when the head office extension became available for use, the cost of unused materials on site amounted to $0.5m. At that date, the total borrowing costs incurred on a loan which was used to specifically finance the head office extension amounted to $0.8m. For the year ended 31 December 2025, how much should be capitalized in respect of the construction of the extension to the head office building?