ACC 304 All Assignments ACC 304 All Assignments | Page 148

a. Interest cost is being incurred.
b. Expenditures for the assets have been made.
c. The interest rate is equal to or greater than the company's cost of
capital.
d. Activities that are necessary to get the asset ready for its intended
use are in progress.
S42. Which of the following is the recommended approach to
handling interest incurred in financing the construction of property,
plant and equipment?
a. Capitalize only the actual interest costs incurred during
construction.
b. Charge construction with all costs of funds employed, whether
identifiable or not.
c. Capitalize no interest during construction.