263 INTEGRATED ANNUAL REPORT 2024 Key Messages Financial Statements Other Information NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024 Overview of Wasco Berhad Value Creation Commitment to Governance Sustainability Journey 25 LOANS AND BORROWINGS (CONTINUED) Recognition and measurement Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditure and borrowing costs are incurred. Capitalisation of borrowing costs is suspended or ceased when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed. All other borrowing costs are recognised in profit or loss using the effective interest method in the period they are incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds. 26 PROVISION FOR WARRANTIES Group 2024 RM’000 2023 RM’000 At 1 January 35,510 22,687 Additions 15,385 17,373 Utilisation (612) (1,043) Reversal (5,125) (4,213) Transfer to liabilities of disposal group - (72) Effect of exchange rate changes (907) 778 At 31 December 44,251 35,510 Recognition and measurement The Group recognises the estimated liability to repair or replace products when the underlying products or services are sold. The provision is calculated based on historical warranty data and specific circumstances related to products or services sold, after considering the various possible outcomes against their associated probabilities. It is expected that most of these costs will be incurred over the warranty period which extends up to 4 years (2023: 4 years).
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