Financial Accounting What event triggersstart of capitalizing interesttheconstruction projects?a) When construction plan is approvedb) When construction loan is obtainedc) When construction activities begind) When first payment is madeon

Explanation of Interest Capitalization: Interest capitalization is the addition of interest costs to…

Answered: Financial Accounting What event…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity

Section: Chapter Questions

Problem 20CYBK

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Borrowing costs on qualifying assets are? a) Always expensed b) Capitalized during the construction period c) Added to reserves d) Deducted from the asset cost
Explain the recording of repayment of grant related to an asset?
Which of the following is typically recorded at its present value? a. long-term investments b. long-term liabilities c. intangible assets d. contigent liabilities
Read the financial accounting Question & provide answer
Which of the following statements is true regarding capitalization of interest? O When excess borrowed funds not immediately needed for construction are temporarily invested, any interest earned should be offset against interest cost incurred when determining the amount of interest cost to be capitalized. O The minimum amount of interest to be capitalized is determined by multiplying a weighted average interest rate by the amount of average accumulated expenditures on qualifying assets during the period. O The amount of interest cost capitalized during the period should not exceed the actual interest cost incurred. O Interest cost capitalized in connection with the purchase of land to be used as a building site should be debited to the land account and not to the building account.
How should the amount of interest capitalized be disclosed in the notes to the financial statements? How should interest revenue from temporarily invested excess funds borrowed to finance the construction of assets be accounted for?
(e) What was the amount of restoration cost recognised in profit or loss during the current reporting period?
Which of the following are the key factors when determining asset allocation for an investment? I. Time an investor has until he needs to use the money from the investment (time horizon) II. Risk preferences (tolerance for risk) III. Current financial situation a. I., II., & III. b. I. & III. c. II. & III. d. I. & II.
Discuss and evaluate the impacts of an asset revaluation on future financial statement? Use and example to explain your answer
Under what conditions should investments be classified as current assets? As long-term assets?
David Mendez Under the percentage-of-completion method, how should the balances of progress billings and construction in process be disclosed in the financial statements prior to the completion of the contract? net, as income from construction if a credit balance, and loss from construction if a debit balance progress billings as deferred income, construction in progress as a deferred expense net, as a current asset if a debit balance, and a current liability if a credit balance progress billings as income, construction in process as inventory
The long-term asset account group is used for which of the following funds? Enterprise Capital Projects Internal Service General Both b and d

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Financial Accounting What event triggers start of capitalizing interest the construction projects? a) When construction plan is approved b) When construction loan is obtained c) When construction activities begin d) When first payment is made on