List of useful info, resources and documents available on other websites about IAS 23 – Borrowing Costs. Summary of IAS 23 – IASPlus Full Text of the IAS 23 as at 31 December 2010 provided by IASB (You need to register) Other useful … Cont…

For development of qualifying assets we took a loan from bank, as per ias 23, interest cost on loan taken for qualifying assets will be capitalized to those assets, as per the loan agreement interest rate was libor+1.5, initially libor was high so to cover the loss of probable higher rate of interest co. went in to interest rate swap and as per that now co. has to pay only fix 4.5%  now libor rate has gone down so my question is, loss on interest swap will be transferred to …

Hello I Have  A question
if i have more than a qualify asset at the same time (say 4) and i only have one loan
how i captilize the interest for each asset (give Examples )as they are all at the same time and they are all different??

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Dear Experts,
I would like to request for your opinion on IAS 23
Funds Borrowed $100 for construction projects
Int @5% p.a.
Out of above $100, kept in bank fixed deposits $80 and balance utilized for construction projects. Later on further $40 paid from FD for Construction projects.
Interest on $100 accounted as interest expense
Interest exepnses DEBIT
Lender A/C CREDIT
Interest on FD accounted as interest income
BANK A/C DEBIT
Interest Income A/C CREDIT
Interest on amount utilized on construction projcets from the date of borrowing till completion of projects accounted as under:
CIP A/C DEBIT
Interest …

Under IAS 23 Borrowing Costs, we are required to capitalize borrowing costs directly attributable to qualifying assets. Qualifying assets are defined as those that necessarily take a “substantial period of time” to get ready for use.
Can anyone help with any rule of thumb or standard practices regarding how long a “substantial period of time” might be?
Thanks
Gord

HI Gord,
From the KPMG insights into IFRS, “substantial period of time” could be
recognized as over 6 months.
Best regards
Adil

Should it not be a period rolling over one financial year?

–
CMA.R

Ask mi answer in spanish.. i live in …

As per IAS 23, borrowing costs on qualifying assets should be capitalised:

To the extent that an entity borrows funds generally and uses them for the purpose of obtaining a qualifying asset, the entity shall determine the amount of borrowing costs eligible for capitalisation by applying a capitalisation rate to the expenditures on that asset. The capitalisation rate shall be the weighted average of the borrowing costs applicable to the borrowings of the entity that are outstanding during the period.
What if a company has interest free loans from shareholders in addition …

As per IAS 23, borrowing costs on qualifying assets should be capitalised:
To the extent that an entity borrows funds generally and uses them for the purpose of obtaining a qualifying asset, the entity shall determine the amount of borrowing costs eligible for capitalisation by applying a capitalisation rate to the expenditures on that asset. The capitalisation rate shall be the weighted average of the borrowing costs applicable to the borrowings of the entity that are outstanding during the period.
What if a company has interest free loans from shareholders in addition …

If the entity’s policy is to capitalise borrowing costs and obtains a foreign loan probably taking advantage of the lower interest rates, any exchange differences should be capitalised as will during the period of construction of the qualifying asset.
Regards,

Nyasha

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As per the amended IAS 23, all borrowing costs on qualifying assets should be capitalised (no option to expense).
Does exchange differences on foreign currency loans qualify as borrowing costs to be capitalised?
Best regards
Allan

Hi Allan

To my understanding any positive/negative FX difference is expensed directly to the P&L.

Regards,
Marc

The change to IAS23 will come into force on Jan 2009. So far that is only allowed alternative, the benchmark tre
atment is to expense.
The exchange differences on foreign currency should be included to assets under construction and therefore capitalised. After capitalisation of qualifying asset any exchange …

Hello,
Does anyone know where the best place to find
information on capitalizing internal software
development under IFRS?  Any links?  Which IAS/IFRS
standard is this covered under?
Thanks in advance for the help!

You raise an interest topic David,  I would like to see the view of others

In the meantime page 56 of the differences between IFRS and US GAAP might help you as in the latter some software deveopment costs can be capitalised which would imply that under IFRS they are not but let us see what the others say

I am sending this to you …