We acknowledge that a general objective of the IASB's standard setting-agenda is the reduction of accounting alternatives in its standards. The ED could be seen in this light. However we see no evidence to support the IASB's conclusion that requiring capitalisation of interest is a higher quality answer.

Specifically we see no evidence in the Invitation to Comment or the ED's Basis for Conclusions that the IASB conducted an analysis of whether users are concerned about treating interest as an expense as opposed to including it as part of the acquisition cost of an asset and (if it did) what the conclusions of that analysis were. We are aware that users represented by the Chartered Financial Analyst Institute have consistently opposed capitalisation of borrowing costs. Indeed in BC 3, the proposals seem to be justified primarily on the basis that FAS 34 and IAS 23 are equally poor standards, We do not think that such a justification is in the spirit of convergence.