{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/835/20/#35-subsequent-measurement","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"835","topic_title":"Interest","subtopic":"835-20","subtopic_title":"Capitalization of Interest","section":{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"835-20-35-1","para":"35-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">This Section addresses the accounting for capitalized interest subsequent to the initial measurement of the related asset.</div></div>","snippet":"This Section addresses the accounting for capitalized interest subsequent to the initial measurement of the related asset.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6a577080e21d02825b08d2ac23fdea3a374ccec6a603797d50d557dec0080194","downloaded_from":"2026-09-10T01:49:14.053Z","last_downloaded_at":"2026-09-10T01:49:14.053Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483065","source_sha256":"1ed5060c14cde78ff2dabb41e380247f4cf61d3879d14039c1ee5d83310c85e0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c51eab2c2bc07413ee2a77597bb0294a6ae731b64c5b5c4273cadfa732edcd2a","downloaded_from":"2026-09-10T01:49:14.053Z","last_downloaded_at":"2026-09-10T01:49:14.053Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483065","source_sha256":"1ed5060c14cde78ff2dabb41e380247f4cf61d3879d14039c1ee5d83310c85e0"}},{"block":null,"heading":"Amortization of Capitalized Interest on an Equity Method Investment","paragraphs":[{"citation":"835-20-35-2","para":"35-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_D438C4ED-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">This Subtopic requires capitalization of <a href=\"/glossary/i/#interest-cost\" class=\"term\" title=\"Interest cost includes interest recognized on obligations having explicit interest rates, interest imputed on certain types of payables in accordance with Subtopic 835-30, and interest related to a finance lease determined in accordance with Topic 842. With respect to obligations having explicit interest rates, interest cost includes amounts resulting from periodic amortization of discount or premium and issue costs on debt.\"><span>interest cost</span></a> on an investment accounted for by the equity method that has not begun its planned principal operations while the investee has <a href=\"/glossary/a/#activities\" class=\"term\" title=\"The term activities is to be construed broadly. It encompasses physical construction of the asset. In addition, it includes all the steps required to prepare the asset for its intended use. For example, it includes administrative and technical activities during the preconstruction stage, such as the development of plans or the process of obtaining permits from governmental authorities. It also includes activities undertaken after construction has begun in order to overcome unforeseen obstacles, such as technical problems, labor disputes, or litigation.\"><span>activities</span></a> in progress necessary to commence its planned principal operations provided that the investee's activities include the use of funds to acquire qualifying assets for its operations. </span></span><span class=\"sfragment\" id=\"sfr_D438C5F2-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Under those circumstances, capitalized interest cost may be associated with the estimated useful lives of the investee's assets and amortized over the same period as those assets. </span></span><span class=\"sfragment\" id=\"sfr_D438C6CC-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Interest capitalized on the investments accounted for by the equity method is amortized consistent with paragraph <a href=\"/asc/323/10/#323-10-35-13\" class=\"xref\">323-10-35-13</a>. </span></span></div></div>","snippet":"This Subtopic requires capitalization of interest cost on an investment accounted for by the equity method that has not begun its planned principal operations while the investee has activities in progress necessary to co…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:168af64d10e2d558c4c0e4b160c158dfe62f6f240f5e387e644a2d7311ac0fd1","downloaded_from":"2026-09-10T01:49:14.053Z","last_downloaded_at":"2026-09-10T01:49:14.053Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483065","source_sha256":"1ed5060c14cde78ff2dabb41e380247f4cf61d3879d14039c1ee5d83310c85e0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c390e78fdfc6af51c81169a4986fed0fac3e7683af91a9842cdde765bce941a5","downloaded_from":"2026-09-10T01:49:14.053Z","last_downloaded_at":"2026-09-10T01:49:14.053Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483065","source_sha256":"1ed5060c14cde78ff2dabb41e380247f4cf61d3879d14039c1ee5d83310c85e0"}},{"block":null,"heading":"Compounding of Interest","paragraphs":[{"citation":"835-20-35-3","para":"35-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_D438C7A0-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">This paragraph addresses whether capitalized interest should be compounded. </span></span><span class=\"sfragment\" id=\"sfr_D438C85E-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The compounding of capitalized interest is conceptually consistent with the conclusion that interest on <a href=\"/glossary/e/#expenditures\" class=\"term\" title=\"Expenditures to which capitalization rates are to be applied are capitalized expenditures (net of progress payment collections) for the qualifying asset that have required the payment of cash, the transfer of other assets, or the incurring of a liability on which interest is recognized (in contrast to liabilities, such as trade payables, accruals, and retainages on which interest is not recognized).\"><span>expenditures</span></a> for the asset is a cost of acquiring the asset. While some portion of the interest incurred during an accounting period may be unpaid at the end of the period, that complication usually may be ignored to simplify practical application. </span></span></div></div>","snippet":"This paragraph addresses whether capitalized interest should be compounded. The compounding of capitalized interest is conceptually consistent with the conclusion that interest on expenditures for the asset is a cost of …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2b854d91def3f83d34d039c5dfa158c6cdeee1f697422718d353fc48cb4bdd53","downloaded_from":"2026-09-10T01:49:14.053Z","last_downloaded_at":"2026-09-10T01:49:14.053Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483065","source_sha256":"1ed5060c14cde78ff2dabb41e380247f4cf61d3879d14039c1ee5d83310c85e0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fa0898a694fc14d3a3c82c25516deb67d4d57bf22e36170c72b8e7816feec747","downloaded_from":"2026-09-10T01:49:14.053Z","last_downloaded_at":"2026-09-10T01:49:14.053Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483065","source_sha256":"1ed5060c14cde78ff2dabb41e380247f4cf61d3879d14039c1ee5d83310c85e0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:97ae5829ff979af50e80ae234aa6a3646e298b87f6004a8d53a35a6855f27ab0","downloaded_from":"2026-09-10T01:49:14.053Z","last_downloaded_at":"2026-09-10T01:49:14.053Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483065","source_sha256":"1ed5060c14cde78ff2dabb41e380247f4cf61d3879d14039c1ee5d83310c85e0"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:97ae5829ff979af50e80ae234aa6a3646e298b87f6004a8d53a35a6855f27ab0","downloaded_from":"2026-09-10T01:49:14.053Z","last_downloaded_at":"2026-09-10T01:49:14.053Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483065","source_sha256":"1ed5060c14cde78ff2dabb41e380247f4cf61d3879d14039c1ee5d83310c85e0"}}