IFRS for SMEs:
Borrowing costs

Definition
Borrowing costs are interest and other costs that an entity incurs in connection with borrowing of funds, financial liabilities and finance lease obligations. 

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This includes finance cost in respect of finance leases and interest on loan.

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Recognition
All borrowing costs should be expensed in income statement in the period in which they are incurred.

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This includes costs related to capital expenditure. Borrowing costs cannot be capitalized.