This document discusses IAS 23 Borrowing Costs. It defines borrowing costs and qualifying assets that allow capitalization of borrowing costs. Borrowing costs can be capitalized as part of the cost of a qualifying asset during the period of time required to complete and prepare the asset for its intended use. Capitalization commences when expenditures are incurred on the asset and ceases when the asset is substantially complete. The document also covers suspension of capitalization, disclosure requirements, and transitional provisions related to IAS 23 Borrowing Costs.

1. IAS 23BORROWING COSTS9/9/20091IAS 23 Borrowing Costs

2. Objective9/9/20092IAS 23 Borrowing Costs

3. Definitions9/9/20093IAS 23 Borrowing Costs

4. Borrowing costs9/9/20094IAS 23 Borrowing Costs

5. Examples of qualifying assets9/9/20095IAS 23 Borrowing Costs

6. Benchmark Treatment9/9/20096IAS 23 Borrowing Costs

7. Allowed alternative treatment9/9/20097IAS 23 Borrowing Costs

8. Recognition of borrowing costs as part of asset9/9/20098IAS 23 Borrowing Costs

9. Borrowing costs eligible for capitalisation9/9/20099IAS 23 Borrowing Costs

10. Commencement of capitalisationExpenditure incurred on assetCash payments, assets transferred, interest bearing liabilities assumedLess progress payments and grants receivedBorrowing costs incurredUse carrying amount of asset to apply capitalisation rateActivities in progress to prepare asset for intended use or saleInclude technical and admin costs prior to constructionExclude asset ready for use but not in production9/9/200910IAS 23 Borrowing Costs

11. Suspension of capitalisationExtended periods in which active development is interruptedActivities necessary to prepare asset for intended use or saleNot when technical or admin work being carried out (e.g. applying for permits)Excludes temporary delays9/9/200911IAS 23 Borrowing Costs

12. Cessation of capitalisationSubstantially all activities necessary to prepare the asset for intended use are completePhysical construction completeMinor modification my be outstandingOr each part of that asset, if capable of being used separatelyE.g. business park with several buildings9/9/200912IAS 23 Borrowing Costs

13. Disclosure9/9/200913IAS 23 Borrowing Costs

14. Transitional Provisions9/9/200914IAS 23 Borrowing Costs

15. SummaryBorrowing costs are expensed as incurredBorrowing costs incurred as part of construction of assets over a period of time may be capitalised as part of the cost of the asset if it is a qualifying assetBorrowing costs on general loans may be capitalised if allocated to assets on a weighted average interest cost on the outstanding balance relating to the carrying amount of the assetThe accounting policy and rate used to calculate capitalised borrowing costs must be disclosedThe amount of borrowing costs capitalised and expensed must be disclosed9/9/200915IAS 23 Borrowing Costs