At its meeting on October 20-22, 2015, the IASB agreed with the recommendation of the Interpretations Committee to clarify the wording in IAS 23, Borrowing Costs through an annual improvement. The IASB discussed a recommendation from the Interpretations Committee to amend IAS 23,  to clarify the calculation of the capitalization rate on general borrowings to be applied to qualifying assets. Specifically, the IASB considered whether specific borrowings should be transferred to the general borrowings pool once the construction of a qualifying asset has been completed. The IASB agreed with the Interpretations Committee’s conclusion that such specific borrowings should be included in the general borrowings pool and that an amendment should be made to IAS 23 to require this treatment. The IASB also decided that: (i) the amendment should be included in the next cycle of annual improvements (2015–2017); and (ii) the proposed amendment should be applied prospectively with early application permitted.

Review the IASB Update.