Perspectives on the Canadian Banking Industry

An overview of IAS 23 on borrowing costs

Under current Canadian GAAP, capitalization of borrowing costs is an accounting policy choice which must be disclosed in the notes to the financial statements. Typically, many institutions in the banking sector expense all borrowing costs in relation to qualifying projects when they are incurred.

However, under International Accounting Standard 23 (IAS 23), there is no option to expense borrowing costs to qualifying projects.

Read this publication to find out what the specific implications to Canadian financial institutions are and the matters which should be considered as they convert to International Financial Reporting Standards (IFRS).

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