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  • Writer's pictureThomas Tsang

FRS116 borrowing rate

The incremental borrowing rate is defined in FRS116. It is not the borrowing rate of the company. So the challenge is how to get the incremental birr rate for a leased asset.


For example, a leased property in Singapore. We can consider to use 3 months SIBOR as starting point as property loan in Singapore is based on SIBOR+. The challenge is how much to adjust upward to determine the incremental borrowing rate of the property to a company in concern.

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