BORROWING COSTS

Section 25

Borrowing Costs

Scope of this section

25. 1 This section specifies the accounting for borrowing costs. Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs include:
    1. interest expense calculated using the effective interest method as described in Section 11 Basic Financial Instruments;
    2. finance charges in respect of finance leases recognised in accordance with Section 20 Leases; and
    3. exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

Recognition

1. An entity shall recognise all borrowing costs as an expense in profit or loss in the period in which they are incurred.

Disclosures

1. Paragraph 5.5(b) requires disclosure of finance costs. Paragraph 11.48(b) requires disclosure of total interest expense (using the effective interest method) for financial liabilities that are not at fair value through profit or loss. This section does not require any additional disclosure.