All interest paid on a construction loan should be capitalized as part of the cost of the constructed asset.

Question

Quizplus · Accepted Answer

Not all interest paid on a construction loan should be capitalized. Only the interest incurred during the period of construction that is directly attributable to the acquisition, construction, or production of a qualifying asset should be capitalized. Interest on loans for periods outside the construction phase should not be capitalized.

All Interest Paid on a Construction Loan Should Be Capitalized