Menu Close

Important Stuff on Ind AS 23, Borrowing Costs

Indian Accounting Standard (Ind AS) 23, Borrowing Costs, Important Material

Brief Summary on Ind AS 23

Detailed Overview of Ind AS 23

Educational Material on Ind AS 23

Quick Reference on Ind AS 23

Complete Text of Ind AS 23

Ind AS 23: Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of that asset. Other borrowing costs are recognised as an expense.

Borrowing costs are interest and other costs incurred relating to borrowing of funds. It includes :

  • Interest expenses calculated using the effective interest rate
  • Finance charges, if the asset acquired under finance leases.

An asset that takes substantial period of time to get ready for its intended use or sale, is known as qualifying asset.


The objective of this standard is to prescribe the treatment of borrowing cost in accounting and its treatment in accounts.


An entity shall apply this Standard in accounting for borrowing costs.

The Standard does not deal with the actual or imputed cost of equity, including preferred capital not classified as a liability.

An entity is not required to apply the Standard to borrowing costs directly attributable to the acquisition, construction or production of:
(a) a qualifying asset measured at fair value; or
(b) inventories that are manufactured, or otherwise produced, in large quantities on a repetitive basis.

Get Important Stuff from CA Blog India Directly in Your Email Inbox:

Follow founder on:

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge