of June 26, 2013 No. 398
About approval of the National accounting standard 23 "Capitalization of borrowing costs" (NSFO 23)
1. Approve the enclosed National accounting standard 23 "Capitalization of borrowing costs" (NSFO 23).
2. This resolution becomes effective since January 1, 2014 and is applied in case of financial reporting preparation for 2014 and the next years, except for financial reporting preparation regarding comparative information for 2013.
Chairman of the board
N. A. Ermakova
Approved by the Resolution of Board of National Bank of the Republic of Belarus of June 26, 2013, No. 398
1. This Standard is developed according to the International accounting standard 23 "Borrowing costs" approved by Council for international accounting standards.
This Standard is applied to the borrowing costs arising since January 1, 2014.
2. The requirements established by this Standard are obligatory for execution by banks and non-bank credit and financial organizations of the Republic of Belarus (further - banks).
3. The purpose of this Standard consists in determination of procedure of payments and the principles of recognition in financial accounting of the borrowing costs which are subject to capitalization, and also disclosures of information on them in the financial reporting of banks.
4. For the purposes of this Standard following terms have the following values:
book value - the cost of investment asset at which he is recognized financial accounting;
borrowing costs - percent on the credits and (or) loans obtained and directed bank on acquisition, creation of investment asset;
investment asset - asset which reduction in the condition suitable for use, requires the period lasting six and more calendar months;
capitalization - accumulation of borrowing costs for the purpose of forming of book value of investment asset;
the accounting period - one calendar month.
5. The assets representing set of costs on objects which the bank intends to recognize in quality can be carried to investment assets:
6. Do not treat investment assets:
assets which in case of their acquisition are suitable for use or for reduction of which in the condition suitable for use less than six calendar months are required;
the costs changing original cost of fixed assets and intangible assets in connection with their reconstruction (upgrade, restoration), carrying out other similar works.
7. The borrowing costs which are directly connected with acquisition, creation of investment asset are subject to capitalization and join in book value of investment asset according to the procedure, determined by this Standard provided that receipt of economic benefits from investment asset in the future is expected and the cost amount can be authentically determined by loans.
8. Costs which could be avoided if acquisition, creation of investment asset was not made belong to the borrowing costs which are directly connected with acquisition, creation of investment asset.
9. The exchange differences on borrowing costs resulting from attraction of the credits and (or) foreign currency loans are recognized financial accounting according to requirements of the National accounting standard 21 "Influence of changes of the currency rates" (NSFO 21) approved by the resolution of the Board of directors of National Bank of the Republic of Belarus of September 28, 2007 No. 297.
10. Capitalization of borrowing costs is made with the frequency established by bank in local regulatory legal act, and in the last working day of the accounting period.
11. The cost amount on loans, subject to capitalization, is determined by multiplication of average size of costs by investment asset in the accounting period on capitalization rate on the credits and (or) loans received and directed to acquisition, creation of investment asset.
12. The credits and (or) loans obtained and directed to acquisition, creation of investment asset are determined by bank independently taking into account requirements of the legislation.
13. Costs on investment asset join the costs which are actually made by bank on acquisition, creation of investment asset as a result of which money was paid, other assets are transferred or obligations to pay them (to transfer) are assumed.
Costs on investment asset are calculated the accruing result from start date of capitalization of borrowing costs.
14. The average size of costs in the accounting period is determined by investment asset as weighted average of the costs which are saved up on it recognized as a part of investments in investment asset excepting the borrowing costs and the amounts of the revaluation performed according to the legislation which are saved up on investment asset capitalized earlier.
15. In case of the direction on acquisition, creation of investment asset of one credit or loan when calculating cost amount for loans which is subject to capitalization as capitalization rate the interest rate for this credit or loan is applied.
In case of the direction on acquisition, creation of investment asset of several credits and (or) loans when calculating cost amount for loans which are subject to capitalization, the capitalization rate is calculated as the relation of the amount of actual costs on loans (regarding the credits and (or) loans obtained and directed to acquisition, creation of investment asset) to the weighted average remaining balance of debt on these credits and (or) loans which are not extinguished for settlement date, during the accounting period.
16. The cost amount on loans, capitalized in the accounting period, shall not exceed cost amount on loans, actually suffered during this period.
17. Capitalization is performed from start date of capitalization before date of the termination of capitalization, excepting the period during which capitalization was suspended, determined according to requirements of Item 19 of this Standard.
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