Wiley GAAP: Financial Statement Disclosure Manual

51ASC 835 INTEREST

1. Authoritative Literature
   1. Subtopics
   2. Scope and Scope Exceptions
   3. ASC 835‐20, Capitalization of Interest
      1. Interest Cost
      2. Capitalization Interest Rate
      3. Capitalizable Base
      4. Determining the Time Period for Interest Capitalization
      5. Capitalization of Interest Costs Incurred on Tax‐Exempt Borrowings
      6. Assets Acquired with Gifts or Grants
   4. ASC 835‐30, Imputation of Interest
      1. Receivables
      2. Note Issued Solely for Cash
      3. Note Issued for Cash and Rights or Privileges
      4. Note Issued in Exchange for Property, Goods, or Services
   5. Debt Issuance Costs
2. Presentation and Disclosure Requirements
   1. Presentation
   2. Disclosure
3. Presentation and Disclosure Examples
   1. Example 54.1: Accounting Policy for Capitalization of Interest
   2. Example 54.2: Amounts Outstanding Presented Net of Debt Issuance Costs
   3. Example 54.3: Debt Discount Amortized to Interest Expense Using Effective Interest Method
   4. Example 54.4: Amortization of Debt Issuance Costs and Debt Discounts

AUTHORITATIVE LITERATURE

ASC 835 provides guidance in two instances—where interest capitalization is in connection with an investment in an asset and where imputation of interest is required.

Per ASC 835‐20, the recorded amount of an asset includes all of the costs necessary to get the asset set up and functioning properly for its intended use, including interest. The principal purposes accomplished by the capitalization of interest costs are:

• To obtain a more accurate measurement of the costs associated with the investment in the asset
• To achieve ...