IAS 23 Borrowing Costs |

Borrowing costs


IAS 23 shall be applied in accounting for borrowing costs but it does not deal with the actual or imputed cost of equity, including preferred capital not classified as a liability.

The standard does not apply to borrowing costs directly attributable to acquisition, construction or production of:

  • a qualifying asset measured at fair value, e.g. a biological asset; or
  • inventories that are manufactured, or otherwise produced, in large quantities on a repetitive basis

IAS 23 decision tree – summary

How do you determine the amount of borrowing costs to be capitalised? The purpose of the following diagram is to summarise the main requirements of the standard and to illustrate the route which preparers need to follow to determine the Read more