When should capitalization of borrowing costs cease?

The correct choice highlights that capitalization of borrowing costs should cease when substantially all activities for preparing the asset are complete. This aligns with the accounting principles set forth in IAS 23 Borrowing Costs, which specifies that borrowing costs incurred during the construction or production of an asset should be capitalized as part of the cost of that asset.

Capitalization of borrowing costs is intended to reflect the true cost of acquiring an asset, and it must stop when the asset is ready for its intended use, meaning that it is substantially complete. At this point, all necessary work related to its construction or enhancement has been finished, and no further borrowing costs related to the asset are required.

The other options do not accurately reflect the completion of the capitalization process. The decrease in workload does not directly indicate readiness for use. Full payment of the asset does not impact whether capitalization should cease, and simply ending the financial period does not determine when the asset is complete and ready for use. Therefore, the cessation of capitalization is best determined by the status of the asset rather than payment, workload, or timing related to financial reporting periods.