The costs that arise from borrowing money from others to finance construction or purchase of assets. This includes interest payments, charges, and fees, etc., associated with loans and other arrangements of borrowing. For an entity, debt issuance costs are usually incurred on the money borrowed either for acquisition of additional resources or replacement of existing resources, etc. An entity may get necessary funds by means of bank loans, or though the secondary market by issuing debt, etc.
These costs are also referred to as financing costs, borrowing costs, or cost of finances.
