AASB 123 - Borrowing Costs - July 2004
Borrowing Costs — Benchmark TreatmentBorrowing Costs — Benchmark Treatment
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ACCOUNTING STANDARD AASB 123
The Australian Accounting Standards Board makes Accounting Standard AASB 123 Borrowing Costs under section 334 of the Corporations Act 2001.
| D.G. Boymal | |
|---|---|
| Dated 15 July 2004 | Chair – AASB |
Accounting STANDARD AASB 123
Borrowing Costs
Objective
The objective of this Standard is to prescribe the accounting treatment for borrowing costs. This Standard generally requires the immediate expensing of borrowing costs. However, the Standard permits, as an allowed alternative treatment, the capitalisation of borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset.
Application
Aus1.1 This Standard applies to:
(a) each entity that is required to prepare financial reports in accordance with Part 2M.3 of the Corporations Act and that is a reporting entity;
(b) general purpose financial reports of each other reporting entity; and
(c) financial reports that are, or are held out to be, general purpose financial reports.
Aus1.2 This Standard applies to annual reporting periods beginning on or after 1 January 2005.
Aus1.3 This Standard shall not be applied to annual reporting periods beginning before 1 January 2005.
Aus1.4 The requirements specified in this Standard apply to the financial report where information resulting from their application is material in accordance with AASB 1031 Materiality.
Aus1.5 When applicable, this Standard supersedes:
(a) AASB 1036 Borrowing Costs as notified in the Commonwealth of Australia Gazette No S 532, 16 December 1997; and
(b) AAS 34 Borrowing Costs as issued in December 1997.
Aus1.6 Both AASB 1036 and AAS 34 remain applicable until superseded by this Standard.
Aus1.7 Notice of this Standard was published in the Commonwealth of Australia Gazette No S 294, 22 July 2004.
Aus1.8 An entity shall recognise and disclose borrowing costs using either:
(a) the benchmark treatment in paragraphs 7 to 9; or
(b) the allowed alternative treatment in paragraphs 10 to 29.
Aus1.9 Adoption of this Standard and continued use of the allowed alternative does not constitute a change in accounting policy for Australian reporting entities that previously complied with AASB 1036.