International GAAP 2013: Generally Accepted Accounting Principles under International Financial Reporting Standards

Chapter 23

Capitalisation of borrowing costs

1 Introduction

2 The requirements of IAS 23

2.1 Core principle

2.2 Scope

3 Qualifying assets

3.1 Inventories

3.2 Assets measured at fair value

3.3 Construction contracts

3.4 Financial assets

4 Definition of borrowing costs

4.1 The definition of borrowing costs in IAS 23

4.2 Other finance costs

5 Borrowing costs eligible for capitalisation

5.1 Directly attributable borrowing costs

5.2 Specific borrowings

5.3 General borrowings

5.3.1 Definition of general borrowings

5.3.2 Calculation of capitalisation rate

5.3.3 Accrued costs

5.3.4 Assets carried in the balance sheet below cost

5.4 Exchange differences as a borrowing cost

5.5 Other finance costs as a borrowing cost

5.5.1 Derivative financial instruments

5.5.2 Gains and losses on derecognition of borrowings

5.5.3 Gains or losses on termination of derivative financial instruments

5.5.4 Dividends payable on shares classified as financial liabilities

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

5.6 Capitalisation of borrowing costs in hyperinflationary economies

5.7 Group considerations

5.7.1 Borrowings in one company and development in another

5.7.2 Qualifying assets held by joint ventures

6 Commencement, suspension and cessation of capitalisation

6.1 Commencement of capitalisation

6.2 Suspension of capitalisation

6.2.1 Impairment considerations

6.3 Cessation of capitalisation

7 Disclosure requirements

7.1 The requirements of IAS 23

7.2 Disclosure ...