International GAAP 2012: Generally Accepted Accounting Practice under International Financial Reporting Standards

Chapter 23

Capitalisation of borrowing costs

1 Introduction

2 The Requirements of IAS

2.1 Core principle

2.2 Scope and definitions

2.2.1 Scope

2.2.2 Qualifying assets

2.2.2.A Inventories

2.2.2.B Assets measured at fair value

2.2.2.C Construction contracts

2.2.2.D Financial assets

2.2.3 Borrowing costs

2.3 Capitalisation of borrowing costs

2.3.1 Directly attributable borrowing costs

2.3.2 General borrowings

2.3.2.A Group considerations

2.3.3 Impairment considerations

2.3.4 Capitalisation of borrowing costs in hyperinflationary economies

2.4 Commencement, suspension and cessation of capitalisation

2.4.1 Commencement of capitalisation

2.4.2 Suspension of capitalisation

2.4.3 Cessation of capitalisation

2.5 Disclosure requirements

2.5.1 The requirements of IAS 23

2.5.2 Other requirements

3 Practical Issues

3.1 Exchange differences as a borrowing cost

3.2 Other finance costs

3.2.1 Derivative financial instruments

3.2.2 Gains and losses on derecognition of borrowings

3.2.3 Gains or losses on termination of derivative financial instruments

3.2.4 Dividends payable on shares classified as financial liabilities

3.2.5 Unwinding discounts on provisions classified as finance costs in profit or loss

3.3 Borrowings and capitalisation rate

3.3.1 Definition of general borrowings

3.3.2 Calculation of capitalisation

3.4 Accrued costs

3.5 Assets carried in the balance sheet below cost

3.6 Group financial statements

3.6.1 Borrowings in one company and development in another

3.6.2 Qualifying assets ...