Capitalized borrowing costs refer to the interest expenses incurred by the company to realize the project or implementation plan. Before the assets are under construction or investment assets are acquired, they cannot be directly deducted as expenses in the current period and need to be carried forward to future years by stages.

When dealing with capitalized borrowing costs, the main role of enterprises is to reduce current profits, improve asset-liability ratio and increase the leverage effect of debtors. At the same time, the capitalization of loan interest expenses can also make the capital cost occur gradually with the progress of project construction and investment. Once the assets are put into operation, the capitalized borrowing costs will be amortized according to the life cycle of the assets, thus reflecting the real cost of the company's operation.

However, capitalized borrowing costs have both advantages and disadvantages. Its advantage lies in enabling enterprises to obtain more funds at lower interest rates, thus speeding up the construction process of the project. The disadvantage is that it can't reflect the actual cash flow and financial situation of the enterprise, which makes the profits and liabilities of the enterprise look better than the actual situation.