The period of time during which interest must be capitalized ends when
A) the asset is substantially complete and ready for its intended use.
B) no further interest cost is being incurred.
C) the asset is fully depreciated.
D) the activities that are necessary to get the asset ready for its intended use have begun.

Question

Quizplus · Accepted Answer

According to accounting standards, interest costs must be capitalized during the period when the asset is being prepared for its intended use. This period ends when the asset is substantially complete and ready for its intended use. Therefore, choice A is the best choice.

The Period of Time During Which Interest Must Be Capitalized