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The Accounting Alternatives (from FAS No. 34)
36. ... the Board considered three basic methods of accounting for interest cost: a. Account for interest on debt as an expense of the period in which it is incurred. b. Capitalize interest on debt as part of the cost of an asset when prescribed conditions are met. c. Capitalize interest on debt and imputed interest on stockholders' equity as part of the cost of an asset when prescribed conditions are met. The Board concluded that the second of those methods should be
adopted. The Board concluded that. . .capitalization of
interest on borrowings in the circumstances specified in this Statement
is preferable to the alternatives of (a) excluding interest from asset
acquisition cost in all circumstances or |