Construction
Capitalizing Interest on Project Loans
Adding interest costs to the value of a 'qualifying asset' during its construction period (IAS 23).
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Construction in Progress (CIP) | Asset (+) | 1,200.00 | - |
| Interest Payable / Cash | Liability/Asset (-) | - | 1,200.00 |
💡 Accountant's Note
If you borrow money specifically to build a factory, the interest paid *during* construction is not an expense—it is part of the cost of the factory.
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