How does the treatment of borrowing costs differ under IFRS compared to US GAAP for long-lived assets?

Under IFRS, borrowing costs directly related to the construction of long-lived assets can be capitalized until the asset is ready for use. In contrast, US GAAP also allows the capitalization of borrowing costs during construction, but the treatment may differ in specific applications and disclosures.

Both IFRS and US GAAP permit the capitalization of borrowing costs that are directly attributable to the construction of long-lived assets. However, IFRS has specific guidance regarding the treatment of income earned from temporarily investing borrowed funds, which reduces the amount of borrowing costs eligible for capitalization. This nuanced difference can affect the total amount capitalized under IFRS compared to US GAAP, where such income treatment may not be as explicitly defined.