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SUMMARY: BORROWING COSTS (IAS23)
1. INTRODUCTION
IAS 23 states that, an entity shall capitalise borrowing cost that are directly attributable to the
acquisition, construction or production of a qualifying asset as part of the cost of that asset.
An entity shall recognise other borrowing costs as an expense in the period in which it is incurred.
2. OBJECTIVES/ OUTCOMES
What you need to achieve in this study unit:
Define borrowing costs and identify qualifying assets.
Determine commencement of capitalisation of borrowing costs and when should it be
suspended or cease.
Determine the amount of borrowing costs that should be capitalised.
Identify taxation implications with regards to the capitalised borrowing costs.
Presentation and disclosure of borrowing costs in the relevant annual financial
statements.
3. CONCEPTUAL FRAMEWORK
a. Definitions.
b. Recognition criteria.
c. Measurement of elements of financial statement and disclosure.
SUMMARY: BORROWING COSTS (IAS23)
SUMMARY: BORROWING COSTS (IAS23)
1. INTRODUCTION
IAS 23 states that, an entity shall capitalise borrowing cost that are directly attributable to the
acquisition, construction or production of a qualifying asset as part of the cost of that asset.
An entity shall recognise other borrowing costs as an expense in the period in which it is incurred.
2. OBJECTIVES/ OUTCOMES
What you need to achieve in this study unit:
Define borrowing costs and identify qualifying assets.
Determine commencement of capitalisation of borrowing costs and when should it be
suspended or cease.
Determine the amount of borrowing costs that should be capitalised.
Identify taxation implications with regards to the capitalised borrowing costs.
Presentation and disclosure of borrowing costs in the relevant annual financial
statements.
3. CONCEPTUAL FRAMEWORK
a. Definitions.
b. Recognition criteria.
c. Measurement of elements of financial statement and disclosure.
SUMMARY: BORROWING COSTS (IAS23)
