(IFRS) for Small and Medium-sized Entities (SMEs)

IFRS FOR SMES – JULY 2009Section 25Borrowing CostsScope of this section25.1 This section specifies the accounting for borrowing costs. Borrowing costs areinterest and other costs that an entity incurs in connection with the borrowing offunds. Borrowing costs include:(a)(b)(c)interest expense calculated using the effective interest method as describedin Section 11 Basic Financial Instruments.finance charges in respect of finance leases recognised in accordance withSection 20 Leases.exchange differences arising from foreign currency borrowings to theextent that they are regarded as an adjustment to interest costs.Recognition25.2 An entity shall recognise all borrowing costs as an expense in profit or loss in theperiod in which they are incurred.Disclosures25.3 Paragraph 5.5(b) requires disclosure of finance costs. Paragraph 11.48(b) requiresdisclosure of total interest expense (using the effective interest method) forfinancial liabilities that are not at fair value through profit or loss. This sectiondoes not require any additional disclosure.© IASCF 151