Final answer:
Borrowing costs under ASPE are capitalized and recognized as assets, and then amortized over the useful life of the asset through the recognition of interest expense.
Step-by-step explanation:
The treatment of borrowing costs under ASPE (Accounting Standards for Private Enterprises) is to capitalize and recognize them as assets. This means that borrowing costs related to the acquisition, construction, or production of a qualifying asset are added to the cost of the asset. They are then amortized over the useful life of the asset through the recognition of interest expense. For example, if a company borrows money to finance the construction of a building, the interest incurred during the construction period would be capitalized and included as part of the building's cost. Over the building's useful life, the capitalized borrowing costs are gradually expensed through the recognition of interest expense.