IAS23_06 - IAS 23 International Accounting Standard 23...

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IAS 23 © IASCF 1179 International Accounting Standard 23 Borrowing Costs This version includes amendments resulting from new and amended IFRSs issued up to 31 December 2005.
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IAS 23 1180 © IASCF C ONTENTS paragraphs INTERNATIONAL ACCOUNTING STANDARD 23 BORROWING COSTS OBJECTIVE SCOPE 1–3 DEFINITIONS 4–6 BORROWING COSTS – BENCHMARK TREATMENT 7–9 Recognition 7–8 Disclosure 9 BORROWING COSTS – ALLOWED ALTERNATIVE TREATMENT 10–28 Recognition 10–28 Borrowing costs eligible for capitalisation 13–18 Excess of the carrying amount of the qualifying asset over recoverable amount 19 Commencement of capitalisation 20–22 Suspension of capitalisation 23–24 Cessation of capitalisation 25–28 DISCLOSURE 29 TRANSITIONAL PROVISIONS 30 EFFECTIVE DATE 31
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IAS 23 © IASCF 1181 International Accounting Standard 23 Borrowing Costs (IAS 23) is set out in paragraphs 1-31. All the paragraphs have equal authority but retain the IASC format of the Standard when it was adopted by the IASB. IAS 23 should be read in the context of its objective, the Preface to International Financial Reporting Standards and the Framework for the Preparation and Presentation of Financial Statements . IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies in the absence of explicit guidance.
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IAS 23 1182 © IASCF International Accounting Standard 23 Borrowing Costs Objective The objective of this Standard is to prescribe the accounting treatment for borrowing costs. This Standard generally requires the immediate expensing of borrowing costs. However, the Standard permits, as an allowed alternative treatment, the capitalisation of borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. Scope 1 This Standard shall be applied in accounting for borrowing costs. 2 This Standard supersedes IAS 23 Capitalisation of Borrowing Costs approved in 1983. 3 This Standard does not deal with the actual or imputed cost of equity, including preferred capital not classified as a liability. Definitions 4 The following terms are used in this Standard with the meanings specified: Borrowing costs are interest and other costs incurred by an entity in connection with the borrowing of funds. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. 5 Borrowing costs may include: (a) interest on bank overdrafts and short-term and long-term borrowings; (b) amortisation of discounts or premiums relating to borrowings; (c) amortisation of ancillary costs incurred in connection with the arrangement of borrowings; (d) finance charges in respect of finance leases recognised in accordance with
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IAS23_06 - IAS 23 International Accounting Standard 23...

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