DISCUSSION: Codification Research Case
Your client is in the planning phase for a major plant expansion, which will involve the construction of a new warehouse. The assistant controller does not believe that interest cost can be included in the cost of the warehouse, because it is a financing expense. Others on the planning team believe that some interest cost can be included in the cost of the warehouse, but no one could identify the specific authoritative guidance for this issue. Your supervisor asks you to research this issue.
Access FASB Codification.
Provide Codification references for your responses.
(1) Is there a limit to the amount of interest that may be capitalized in a period?
(2) If interest capitalization is allowed, what disclosures are required?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.