Intressikulusid

Intressikulusid is an Estonian term meaning interest costs. It refers to the costs incurred by a borrower due to borrowing funds. These costs arise from interest payments on loans, bonds, lines of credit, and other financing arrangements. Intressikulusid are a key part of financing expenses for both individuals and organizations and are typically reported on the income statement as financing costs or interest expense. They may also be capitalized under certain circumstances when the borrowing finances the construction or purchase of assets, so that the cost is added to the asset's capitalized cost rather than expensed immediately.

Calculation of intressikulusid typically involves the stated interest rate applied to the outstanding principal. Depending on the instrument, factors such as compounding, payment schedules, and variable rates affect the timing and amount of recognized costs. In variable-rate debt, costs can fluctuate with changes in interest rates.

Accounting and presentation usually separate intressikulusid from principal repayments. They are distinguished from depreciation, amortization, and from interest income earned on investments. Under different accounting frameworks (such as IFRS or national GAAP), they are shown as financing costs or interest expense in the income statement, with possible capitalization of borrowing costs in specific asset construction scenarios.

Tax and regulation vary by jurisdiction. In many systems, interest costs are deductible against taxable income within applicable limits, though rules may restrict deductibility in leveraged structures or related-party debt. Practical budgeting of intressikulusid requires a debt schedule and rate assumptions, and borrowers may use hedging or fixed-rate products to manage exposure.

See also: Interest expense; Financing costs; Debt service; Capitalized interest.