Capitalization of Interest Cost
- Discuss the diversity in practice concerning the capitalization of interest costs prior to the Issuance of FAS No. 34.
- Should the historical cost of acquiring an asset include any interest cost? If so, why?
- What are the objectives of capitalizing interest costs?
- What assets qualify for capitalization of interest cost?
- Should interest cost be capitalized for routinely manufactured inventories? Why or why not?
- What types of assets should interest not be capitalized for?
- If land is undergoing activities necessary to get it ready for its intended use, should interest cost be capitalized?
- In general, what amount of interest cost should be capitalized for qualifying assets?
- How is the amount of interest to be capitalized in an accounting period determined?
- Discuss the determination of the capitalization rate(s).
- What is the limit on the amount of interest to be capitalized during an accounting period?
- What is the meaning of the term "expenditures?"
- When does the capitalization period begin?
- How long does the interest capitalization continue?
- When should the capitalization period end?
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