Reading 37: Long-Lived Assets LOShA习题精选 2010, accounting, standards, including, interest

honeycfa

Session 9: Financial Reporting and Analysis: Inventories, Long-Term Assets, Deferred Taxes, and On- and Off-Balance Sheet Debt
Reading 37: Long-Lived Assets

LOS a: Explain the accounting standards related to the capitalization of expenditures as part of long-lived assets, including interest costs.

Capitalizing interest costs related to a company’s construction of assets for its own use is required by:

A) IFRS only.

B) U.S. GAAP only.

C) both IFRS and U.S. GAAP.

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Both U.S. GAAP and IFRS require companies to capitalize the interest that accrues during a the construction of capital assets for their own use.

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thanks

honeycfa

Capitalized interest costs are typically reported in the cash flow statement as an outflow from:

A) operating.

B) financing.

C) investing.

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Capitalized interest costs are reported as CFI on the statement of cash flows, as they are treated as part of the cost of the constructed capital asset.