If interest capitalization allowed what disclosures requied

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Codification Research Case

  • Your client is in the planning phase for a major plant expansion, which will involve the construction of a new warehouse. The assistant controller does not believe that interest cost can be included in the cost of the warehouse, because it is a financing expense. Others on the planning team believe that some interest cost can be included in the cost of the warehouse, but no one could identify the specific authoritative guidance for this issue. Your supervisor asks you to research this issue. Instructions

 prepare responses to the following. Provide Codification references for your responses.

(1) Is there a limit to the amount of interest that may be capitalized in a period?

(2) If interest capitalization is allowed, what disclosures are required?

  • PLEASE PROVIDE 200 WORDS WITH REFERENCES

Reference no: EM132449458

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