SLAS 20: Borrowing costs

This study from CIMA Sri Lanka's accounting standard study group interprets how borrowing costs should be treated in an organisation’s financial statements.

Though the standard generally requires borrowing costs to be charged as an expense to the P&L, it also allows capitalising borrowing costs as an alternative. It moves on to state that capitalising is only allowed when the associated costs are directly attributable to the acquisition, construction or production of a qualifying asset.

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