Global Standards for the world economy

Tuesday 18 February 2020

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Work plan for IFRSs

Borrowing Costs


This project is complete. The Board published a revised IAS 23 in March 2007. Information on the project is retained for background reading purposes only.

IAS 23 provides guidance on the accounting treatment for borrowing costs. Borrowing costs are interest and other costs incurred by an entity in connection with the borrowing of funds.

The Board's objectives in this project are:


(a) This project is part of the Short-term Convergence project with the US Financial Accounting Standards Board (FASB). The purpose is to reduce differences between IFRSs and US generally accepted accounting principles (US GAAP) that can be resolved in a relatively short time and can be addressed outside major projects.

(b) The objective of this short-term convergence project is to amend IAS 23 Borrowing Costs, by removing the main difference between US GAAP and IAS 23. This will be done by requiring the capitalisation of borrowing costs, to the extent they are directly attributable to the acquisition, production or construction of a qualifying asset. [1] The existing option of immediate recognition of those borrowing costs as an expense will be removed.

[1] Assets eligible for capitalisation are those that need a period of time to get ready for their intended use or sale and are denominated by IAS 23 and SFAS 34 as qualifying assets.

Is this project part of the Memorandum of Understanding?


The MoU sets out a Roadmap of Convergence between IFRSs and US GAAP 2006-2008. The purpose of the Roadmap is to remove the need for the reconciliation requirement for non-US companies that use IFRSs and are registered in the United States of America. The intention is to issue converged standards, the contents and effective dates of which to be determined after taking full account of comments received in response to the Exposure Drafts.

Click here  for more information on the MoU.

The progress expected to be achieved by 2008 is to complete a final standard with the amendments to achieve the objectives set out above. The Board published a revised IAS 23 in March 2007, thus achieving the milestone set in the MoU.

Related information

  • Download a pdf version the full project summary.
  • Click here for the Appendix to the project summary.
  • Click here for the Exposure Draft of Proposed amendments to IAS 23 Borrowing costs
  • Click here to view the comment letters submitted on the ED

Project contacts

Anne McGeachin
Senior Project Manager


Patrina Buchanan
Project Manager