IASB exposure draft on borrowing costs
May 25, 2006
The IASB has published an exposure draft proposing to amend IAS 23 'Borrowing Costs' as part of its short-term convergence project with the US Financial Accounting Standards Board (FASB).
The objective of the convergence project is to reduce differences between the IASB's International Financial Reporting Standards (IFRSs) and US generally accepted accounting principles (GAAP).
The Exposure Draft proposes to require an entity to capitalise borrowing costs directly attributable to the acquisition, construction, or production of a qualifying asset as part of the cost of that asset.
The option of immediately recognising those borrowing costs as an expense, which is in the current version of IAS 23, would be removed.