Short-term Convergence: Borrowing Costs

Date recorded:

The Board has decided to issue an exposure draft with an amendment to IAS 23 to remove the option to expense borrowing costs when they are incurred.

The Board agreed that this amendment should not be applied to borrowing costs directly attributable to the acquisition, construction or production of qualifying assets measured at fair value (such as biological assets). If this exception were not made, entities would be forced to capitalise interest costs on this assets, only to then write them back off again when remeasuring the assets to fair value.

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