Capitalized interest refers to interest costs we add to the asset account rather than recording as interest expense.

Question

Quizplus · Accepted Answer

Capitalized interest is added to the cost of an asset and is recorded as part of the asset's cost rather than being recognized as an interest expense. This increases the overall cost of an asset but allows the interest expenses to be spread out over the useful life of the asset.

Capitalized Interest Refers to Interest Costs We Add to the Asset