What Are Borrowing Costs?

Borrowing costs refer to interest and other expenses related to borrowing, including interest rate adjustments due to exchange rate differences in foreign currency borrowings. Borrowing costs are mainly interest expenses, and generally, financing costs are small and can be ignored. Because interest can be included in costs, part of the income tax can be reduced.

Borrowing cost

discuss

Borrowing costs refer to interest and other expenses related to borrowing, including interest rate adjustments due to exchange rate differences in foreign currency borrowings. Borrowing costs are mainly interest expenses, and generally, financing costs are small and can be ignored. Because interest can be included in costs, part of the income tax can be reduced.

Chinese name

Borrowing cost

Nature

Loan

Borrowing costs refer to interest and other expenses related to borrowing, including interest rate adjustments due to exchange rate differences in foreign currency borrowings. Borrowing costs are mainly interest expenses, and generally, financing costs are small and can be ignored. Because interest can be included in costs, part of the income tax can be reduced.

The calculation formula is:

Ke = Re (1-T)

In the formula: Ke is the cost of borrowing; Re is the borrowing interest rate; T is the income tax rate.