𝗪𝗵𝗲𝗻 𝗳𝘂𝗻𝗱𝗶𝗻𝗴 𝗰𝗼𝘀𝘁𝘀 𝗰𝗮𝗻 𝘁𝘂𝗿𝗻 𝗶𝗻𝘁𝗼 𝗮 𝗯𝗹𝗮𝗰𝗸 𝗯𝗼𝘅
In valuation, we spend enormous effort refining cash flows.
But the discount rate is often treated as if it were clean and observable.
In ASEAN, it rarely is.
At the most basic level, “interest expense” itself is often ambiguously defined.
In some markets, it appears as interest expense. In others, it is grouped under financing expense or financing cost — requiring analysts to manually verify what it actually contains.
What sits inside that single line item may include:
Contractual interest on bank loans and bonds
Commitment fees and upfront financing costs
Refinancing costs rolled into the P&L
FX losses embedded in funding structures
Amortisation of financing fees
Fair value losses
Shareholder or related-party financing with non-market terms
All this may be reported under one label.