User:Sulmues/IAS 23

IAS 23 or Borrowing Costs is an accounting standard concerning costs of borrowing under the IFRS rules set by the International Accounting Standards Board.

In March 2007 the IASB issued a revised IAS 23. Since then, IAS 23 and its accompanying documents have been amended by Improvements to IFRSs (issued May 2008).

The following Interpretations refer to IAS 23:
 * IFRIC 1: Changes in Existing Decommissioning, Restoration and Similar Liabilities (issued May 2004 and subsequently amended);
 * IFRIC 12 Service Concession Arrangements (issued November 2006 and subsequently amended)

Definition
Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds.

A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

Borrowing costs may include the following:
 * 1) Interest expense calculated using the effective interest method; as described in IAS 39 Financial Instruments: Recognition and Measurement.
 * 2) Finance charges in respect of finance leases recognised in accordance with IAS 17 (Leases);
 * 3) Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

Borrowing costs eligible for capitalisation
===Excess of the carrying amount of the qualifying asset over recoverable amount===