IAS 23 - Borrowing Costs
Financial Dictionary — IFRS & IAS Standards
Definition
IAS 23 requires capitalization of borrowing costs that are directly attributable to the acquisition or construction of qualifying assets. Other borrowing costs are expensed as incurred.
Use cases, Example & Why it matters
Use cases
- Used when applying IFRS/IAS requirements for recognition, measurement, presentation, or disclosure.
- Used to justify accounting treatments in working papers and financial statement notes.
- Used to justify accounting treatments in working papers and financial statement notes.
Example
- Example: When preparing year-end reporting, management applies **IAS 23 - Borrowing Costs** to determine the correct IFRS treatment and disclosures.
Why it matters
- Why it matters: Ensures compliance with IFRS, improves comparability across periods and entities, and reduces financial reporting risk.