AASB 123 - Borrowing Costs

Interpretations relating to AASB 123 Borrowing Costs are listed below:

Interpretation 1
Changes in Existing Decommissioning, Restoration and Similar Liabilities

Operative date: 1 January 2009
Issue date: June 2007

Changes in the measurement of an existing decommissioning, restoration and similar liability that result from changes in the estimated timing or amount of the outflow of resources embodying economic benefits required to settle the obligation, or a change in the discount rate are accounted for as follows:
- If the related asset is measured at cost, changes are capitalised as part of cost of the asset and depreciated over the remaining useful life.
- If the related asset is revalued, changes are recognised in the asset revaluation reserve, similar to other revaluation movements. (NB for not-for-profit entities, this requirement is applied to a class of assets, consistent with AASB 116 Property, Plant & Equipment).
  The increase in the liability that reflects the passage of time is recognised in profit or loss as a finance cost.
Related AASB standards: AASB 101, AASB 116, AASB 123, AASB 136, AASB 137.

Interpretation 12
Service Concession Arrangements

Operative date: 1 January 2009
Issue date: June 2007

In a public-to-private service concession arrangement, the operator is required to:
- Recognise and measure revenue received under the contract in accordance with AASB 118 Revenue and AASB 111 Construction Contracts.
- Allocate the consideration received to the different elements (eg construction and maintenance) of the contract, based on each identifiable element’s fair value.
- Recognise either:
Related AASB Standards: AASB 1, AASB 7, AASB 108, AASB 111, AASB 116, AASB 117, AASB 118, AASB 120, AASB 123, AASB 132, AASB 136, AASB 137, AASB 138, AASB 139.