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Q,for accounting professionals When should i capitalize interest cost of loan?

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Question ajoutée par mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia
Date de publication: 2014/09/19
Almutaz Bakry Sidahmed
par Almutaz Bakry Sidahmed , Internal Audit Manager , Banan real estate

The interest of a loan that is directly attributable to the acquisition, construction or production of a qualifying asset is considered part of the cost of that asset and, therefore, should be capitalized. Capitalization should commence when expenditures are being incurred, interest  is being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress.

Capitalization should cease when substantially all of the activities necessary to prepare the asset for its intended use or sale are complete.

mohamed Hakim CMA CPA Candidate
par mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia

Good answer 

Thanks 

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