Imputing and Capitalizing Interest – What You Need to Know ON DEMAND

Overview

This course covers the accounting requirements for interest costs under U.S. GAAP, focusing on both imputation and capitalization. It begins with a review of the rules for recognizing imputed interest when no stated rate exists or when terms are not at market. You’ll learn how to identify transactions that require imputation, how to determine the appropriate interest rate, and how to record the resulting amounts. The course then shifts to the rules for capitalizing interest related to the construction or production of qualifying assets. It explains how to determine which assets qualify, how to calculate capitalizable interest, and how to apply the guidance during the capitalization period. Together, these topics provide a clear and practical understanding of how interest costs affect the financial statements.

Highlights

Accounting for imputed interest. Scope of ASC 835-30. Imputing interest. Determining the right interest rate. The interest method. Subsequent measurement requirements. Presentation and disclosure requirements. Accounting for capitalized interest. Scope of ASC 835-20. Capitalization period. How much to capitalize.

Prerequisites

None.

Designed For

CPAs, CEOs, CFOs, controllers, and other financial managers.

Objectives

Identify situations where imputed interest must be recognized under U.S. GAAP. Determine the appropriate interest rate to use when imputing interest. Recognize the financial statement impact of recording imputed interest. Distinguish between arrangements that require imputation and those that do not. Identify assets that qualify for interest capitalization. Determine the amount of interest cost eligible for capitalization. Recognize the period during which interest must be capitalized. Distinguish between interest costs that are capitalized and those that must be expensed.

Preparation

None.

Notice

None.