Deloitte comment letter on tentative agenda decision on IAS 23 — Expenditures on a qualifying asset

Published on: 21 Aug, 2018

We have commented on the IFRS Interpretations Committee's publication in the June 2018 IFRIC Update of the tentative decision not to take onto the Committee's agenda the request for clarification on the amount of borrowing costs eligible for capitalisation when an entity uses general borrowings to obtain a qualifying asset.

We agree with the IFRS Interpretations Committee's decision not to add this item onto its agenda for the reasons set out in the tentative agenda decision, although we believe that the value of the tentative agenda decision could be enhanced by elaborating on the statement that “the entity does not disregard expenditures on the qualifying asset incurred before the entity obtains the general borrowings” to clarify that this is because borrowings can be necessary to fund expenditures incurred before, as well as after, those borrowings are drawn down.

Download the full comment letter below.


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