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

    Return to Review Questions
    Return to Topical Outline
    .Return to Contemporary Accounting Issues