The International Accounting Standards Board has issued a revised standard on borrowing costs.

The main change to the standard is the removal of the option to immediately recognize as an expense borrowing costs that relate to assets that take a substantial period of time to get ready for use or sale.

The board said that the revised standard continues work in it short-term convergence project with the U.S. Financial Accounting Standards Board to reduce differences between international standards and U.S.  GAAP.

IASB Chairman David Tweedie said that the change will improve financial reporting in three ways. First,  the cost of an asset will now include all costs incurred in getting it ready for use, or sale. Second, comparability will be enhanced because one of the two accounting treatments that previously existed for those borrowing costs is removed. Finally, the revision to IAS 23 achieves convergence in principle with U.S. GAAP.

IAS 23, “Borrowing Costs,” is available for e IFRS subscribers (a service available from now. In addition, for a limited period subscribers may view the text of the superseded version of IAS 23 marked to show the changes made by the revised version. Printed copies of the standard will be available soon from the IASC Foundation Publications Department.

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