IAS 7 — Interest paid that is capitalised

Date recorded:

In May 2012, the IASB published Exposure Draft ED/2012/1 Annual Improvements to IFRSs 2010-2012 Cycle which proposed to amend IAS 7 Statement of Cash Flows to clarify the classification of interest paid that is capitalised into the cost of property, plant and equipment in the statement of cash flows.

At this meeting, the staff intended to provide an analysis of the comment letters received on the proposal to clarify that capitalised interest payments should have a consistent classification in the statement of cash flows with other payments for the underlying asset into which those payments were capitalised.

However, as outlined above, the Committee did not specifically discuss this issue. Instead, the Committee tentatively decided that it not be addressing this issue given an inability to reach a consensus on the broader IAS 7 principles.

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