Annual Improvements 2015–2017: IAS 23 — Borrowing costs on completed qualifying assets

Date recorded:


This paper analysed the feedback received on the proposed amendments to IAS 23. The Board proposed to amend IAS 23 to clarify that when a qualifying asset is ready for its intended use or sale, an entity treats any outstanding borrowings made specifically to obtain that qualifying asset as part of the funds that it has borrowed generally.

Staff analysis of feedback received

A large number of respondents agreed with the proposed amendments. There were no substantive comments other than to clarify the points set out in the Staff recommendation below. Point (b) of the recommendation has been discussed and reconfirmed by the Board and the IC in 2009.

Staff recommendation to the Board

The Staff recommend that the Board finalise the proposed amendments to IAS 23, and in doing so, clarify:

  1. the rationale for the amendments in the Basis for Conclusions; and
  2. that an entity includes funds borrowed specifically to obtain a non-qualifying asset as part of general borrowings.


The IC unanimously approved the Staff recommendation with no significant discussion.

One IC member asked how recommendation (b) would affect the composition of the general borrowings pool if regulation or a contract specifies that certain borrowings could only be used for a particular purpose, e.g. for operations and not for asset acquisitions. The Staff responded that IAS 23 is clear in this regard and did not believe further clarification is necessary.

Correction list for hyphenation

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