Interest may be capitalized: a. Whether or not there is specific borrowing for the construction. b. On self-constructed assets from the date an entity formally adopts a plan to build a discrete project. c. On routinely manufactured goods as well as self-constructed assets. d. Whether or not there are actual interest costs incurred.

Question

Freddy Garza

Business

22 April, 19:02

Interest may be capitalized: a. Whether or not there is specific borrowing for the construction. b. On self-constructed assets from the date an entity formally adopts a plan to build a discrete project. c. On routinely manufactured goods as well as self-constructed assets. d. Whether or not there are actual interest costs incurred.

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Answers (1)

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Samara Holder · Answer 1

The correct option is A

Explanation:

Capitalization is the term or the process in which there is an addition of the interest which is unpaid to the principal amount of the loan. And the principal or the original amount of the loan increases or rises when the payments got postponed during the deferment periods and then the interest which is unpaid is capitalized.

So, it will be capitalized whether or not there is particular or the specific amount of borrowing for the construction.