Accounting for interest on term loan during pre construction

Shashidhar Jayaraman (Principal and CFO) (24 Points)

06 September 2012  

Hi

Wanted to understand the accounting to be done for the interest paid on term loan during the pre construction phase.

a. should the interest be capitalized with the asset and depreciated or

b. should the interest be charged off once commercial production begins or

c. should the interest be amortized separately

would appreciate advise in line with the accepted guidelines

Thanks

Shashi