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The proper accounting for interest costs has been a longstanding controversy. Three approaches have been suggested to account for the interest incurred in financing the
The proper accounting for interest costs has been a longstanding controversy. Three approaches have been suggested to account for the interest incurred in financing the construction of property, plant, and equipment:
a) Capitalize no interest charges during construction.
b) Charge construction with all costs of funds employed, whether identifiable or not.
c) Capitalize only the actual interest costs incurred during construction.
Choose either approach a) or b) and compare and contrast your choice with approach c).
(150 words atleast)
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