Korkomenot

Korkomenot is a Finnish accounting term that refers to the costs incurred from borrowing money or using credit. They primarily represent the interest payments on loans, bonds, lines of credit, and other forms of financing. In addition to explicit interest, korkomenot can include ancillary financing costs related to borrowing arrangements. They should not be confused with principal repayments or with capital expenditures on assets.

In financial reporting, korkomenot are typically recognised as expenses on the income statement, classified as financial or financing expenses. They accrue over time as interest becomes due, and are usually measured at the contractual or market rate of interest. When borrowing costs are directly attributable to the acquisition, construction, or production of a qualifying asset, some or all of these costs may be capitalized as part of the asset’s cost under standards such as IFRS or national equivalents.

The presentation of korkomenot can vary by jurisdiction and reporting framework, but they are generally disclosed as a separate line item or within financing costs, with notes that describe the nature and terms of the borrowings. Korkomenot influence profitability and cash flow, and are often a focal point in debt management and interest-rate risk analyses.

Tax treatment of korkomenot varies by country. In many systems, interest expenses are deductible from taxable income for corporations, subject to limits or rules intended to curb excessive interest deductions. For individuals, mortgage and other personal interest may also be deductible in some jurisdictions. See also: interest income, borrowing costs, capitalization of borrowing costs, effective interest rate.