Special newsletter on borrowing cost amendments
24 Apr 2007
Deloitte's IFRS Global Office has published a special edition of our IAS Plus Newsletter titled IASB Issues Revised Standard on Borrowing Costs.
On 29 March 2007 the IASB amended IAS 23 Borrowing Costs to eliminate the option to recognise all borrowing costs immediately as an expense. To the extent that borrowing costs relate to the acquisition, construction, or production of a qualifying asset, the revised IAS 23 requires that they be capitalised as part of the cost of that asset. All other borrowing costs should be expensed as incurred. The amendments eliminate the main difference in the fundamental accounting recognition principle between IFRSs and US GAAP in this area, although significant measurement differences remain. The revised Standard applies to borrowing costs relating to qualifying assets for which the commencement date for capitalisation is on or after 1 January 2009. Earlier application is permitted.
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