标题: Interest Cost in a long live asset [打印本页] 作者: cross-ied 时间: 2011-7-13 16:29 标题: Interest Cost in a long live asset
Suppose a firm builds a building using a loan (debt), the interest is capitalized
But, if the firm builds a building with its own money(no debt), then interest rate on existing related borrowings are taken into account(say 5 % for example)....
Will this cost(opportunity cost of cash held) be expensed or capitalized and why?
I think it should be capitalized作者: Siddimaula 时间: 2011-7-13 16:29
Im asking if the firm builds an asset without a loan, ie with its money, so will the opportunity cost of that cash be capitalized?
For example:--
Say a firm built an asset for $1m dollars and interst rate in the Market is approx 5%
if the company builds the asset with its OWN cash ( in one year) , will the balance sheet show an asset of $1m or $1m + $50,000...???作者: siavosh 时间: 2011-7-13 16:29
opportunity costs never go on financial statements...
