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IAS 23 Borrowing Costs

IAS 23 Borrowing Costs requires borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset to form part of the cost of that asset. Other borrowing costs are recognised as an expense.

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Summary

Borrowing costs are those interest costs (including related exchange differences) that are directly attributable to the acquisition, construction or production of a qualifying asset.

  • A qualifying asset is an asset that takes a substantial period of time to get ready for its intended use.
  • Borrowing costs, in relation to qualifying assets are capitalised where they arise during the period that the asset is being prepared for use or sale.

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