0
Interest is capitalized during the construction period for a) assets built for a company's own use as well as b) assets constructed as discrete projects for sale or lease (a ship or a real estate development, for example) This excludes from interest capitalization inventories that are routinely manufactured in large quantities on a repetitive basis and assets that already are in use or are ready for their intended use. Hence Only assest that are constructed as discrete projects qualify for interest capitalization. Only interest incurred during the construction period is eligible for capitalization.
Wiki User
∙ 15y ago
Add your answer:
Earn +20 pts
Is capitalized leases intangible assets?
No
Why is interest capitalized?
Interest is capitalized because it helps finance the construction of a long-term asset. Interest is money paid regularly at a certain rate.
The owner interest in the assets of a corporation are alternately known as?
The owners interest in the assets of a corporation are alternately known as stockholders' equity.
What is the difference between capitalized interest and accrued interest?
Interest received is the amount in currency that has been realized at the end of the term(on liquidation).Where as, bank will be calculating interest and that will be accrued to your account based on the frequency set, (daily,weekly..) for calculation purpose..
Intangible assets are capitalized and amortized over periods benefited?
Matching principle
Which of the following costs are capitalized for self-constructed assets?
Materials, labor and overhead.
What is the main distinction between inventory and plant assets?
In accounting, inventory is considered a "for sale" asset, plant assets are not.
What are domestic interest margins?
It net interest income as a percentage of average interest-earning assets
What are rate sensitive assets?
Bank assets are called rate sensitive assets. These bank assets are always subject to changes because of the interest rates.
What is the difference between net interest margin and net spread?
net interest margin=(Income interest-Expense interest)/average earning assets net spread=Income interest/average earning assets - Expense interest/average deposits and other funds
What is revaluation of plant assets?
A plant asset is an asset such as land, buildings, and machinery that will be useful for more than one year and is used to help produce revenues for a business. Plant assets are also known as fixed assets. Revaluation of plant/fixed assets is the process of increasing or decreasing their carrying value in the event of major changes in the fair market value of the assets.
Interest bearing note payable?
current assets
