Interest may be included in the acquisition cost of property, plant, and equipment
A) during the construction period of a self-constructed asset.
B) if the asset is purchased on credit.
C) if the asset acquisition is financed by a long-term note payable.
D) if it is a part of a lump-sum purchase.

Question

Quizplus · Accepted Answer

Interest can be capitalized as part of the acquisition cost of property, plant, and equipment during the construction period of a self-constructed asset, as it is considered part of the cost necessary to bring the asset to its intended use.

Interest May Be Included in the Acquisition Cost of Property