IPSASB issues proposed amendments to IPSAS 5 on Borrowing Costs

At its September meeting, the IPSASB approved proposed changes to IPSAS 5. Views are sought from stakeholders on the proposed changes.

Proposed amendments

As part of the IPSASB’s Consultation Paper on Measurement, it requested respondents’ views on whether borrowing costs should only be expensed, i.e. eliminate the allowed alternative accounting treatment which permits the capitalisation of borrowing costs. Respondents’ views varied, with support expressed by some, and disagreement expressed by others.

The IPSASB agreed to retain both options, which means there are no changes proposed to the authoritative material in IPSAS 5. The basis for conclusions has been updated to reflect the IPSASB’s deliberations on the expensing or capitalisation of borrowing costs. Respondents raised a number of application issues with IPSAS 5 in their responses. The IPSASB has developed non-authoritative implementation guidance and illustrative examples address these issues.

How to access the Exposure Draft

The Exposure Draft – once published – can be accessed on the IPSASB’s website by following this link.

Locally, the Secretariat will arrange roundtable discussions to discuss the proposals in the IPSASB’s Exposure Drafts.

The views expressed in this article are those of Secretariat and not the ASB Board.