PAS 23 - BORROWING COSTS (PAS 23) MODULE OBJECTIVES...

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BORROWING COSTS (PAS 23)
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MODULE OBJECTIVES Understand the proper treatment of borrowing costs. Compute the amount of borrowing costs eligible for capitalization as part of the cost of qualifying asset. Identify required disclosures relating to borrowing costs.
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BORROWING COSTS Borrowing costs are interest and other costs incurred by an entity in connection with the borrowing of funds. Include Interest on bank overdrafts and borrowings Amortization of discounts or premiums Amortization of ancillary costs Finance charges in respect of finance leases Exchange differences arising from foreign currency borrowings to the extent that they are adjustments to interest costs
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ACCOUNTING FOR BORROWING COSTS Benchmark Treatment Treated as expense in the period incurred and shown as finance costs on the income statement, no matter how the borrowing proceeds are used by the enterprise. Allowed Alternative Borrowing costs incurred during period of construction of qualifying assets are treated as part of costs of qualifying asset.
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Capitalized Borrowing Costs Under the allowed alternative treatment, the following conditions must be met for the
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PAS 23 - BORROWING COSTS (PAS 23) MODULE OBJECTIVES...

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