Notes to the Financial Statements Note 3: Revenue and Expenses continued Recognition and measurement of expenses Total finance costs: Includes borrowing costs primarily related to interest expense net of a $14m gain reclassified to the profit and loss (2022: $1m) in connection with Group’s treasury lock arrangement and lease related interest expense. Lease related interest expense and borrowing costs are recognised as an expense when incurred, except where finance costs are directly attributable to the acquisition or construction of a qualifying asset where they are capitalised as part of the cost of the asset. Capitalised interest for qualifying assets during the year ended 30 June 2023 was $61m (2022: $27m). The weighted average interest rate applicable to capitalised borrowing costs during the year was 3.4% (2022: 2.4%). Any difference between borrowing proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive income using the effective interest method. Unrealised foreign currency losses/(gains) on debt is principally related to the Group’s EUR250m and CHF400m senior unsecured notes in the US Private Placement market. The foreign currency risk related to this debt was partially hedged as a cash flow hedge. Fair value losses on financial assets primarily relates to the Group’s investments in venture funds measured at fair value through profit or loss (Note 11(e)). The resulting changes in fair value are recognised directly in profit or loss within finance costs at each reporting period. Goods and Services Tax (GST) and other foreign equivalents: Amounts are recognised net of GST, except where GST is not recoverable from a taxation authority, in which case it is recognised as part of an asset’s cost or expense. CSL Limited Annual Report 2022/23 126
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