ABSTRACT
Capitalizing borrowing costs When money is borrowed to finance the construction of fixed assets, should the interest cost during construction be ‘capitalized’ (added to the cost of the fixed asset), or written off as an expense? (Capitalizing would not mean losing the immediate tax-deductibility of interest paid.) FRS 15 says either capitalize all such borrowing costs or none. IAS 23 prefers expensing, but permits capitalization.
