WarrenB1

alright
as you know, interest expense should be expensed for analytical purposes.

Capitalization of interest expense (as reported) increases EBIT favorably:
EBIT+Capped int-depretiation--->reported EBIT with capped interest expense.

Because Capped int expense>depretiation, EBIT is thus increased.

To remove the effect,
we adjust reported EBIT:
reported EBIT-capped interest expense+depretiation

we adjust int expense:
reported int expense + capped interest expense that should be expensed.



Edited 2 time(s). Last edit at Sunday, May 29, 2011 at 01:45PM by passme.