ASC 835-922

Entertainment—Cable Television

835 Interest

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Source downloaded: 2026-09-10T01:50:42.248Z.Record version 099444549da8. Effective date must be checked in the source.

In brief

IntermediateInitial measurement Inventory and PP&E Industry-specific

This Subtopic tells cable television entities how much interest cost to capitalize while a cable system is under construction during the "prematurity period." Interest is capitalized under Topic 835 by applying the capitalization rate from 835-20-30-3 through 30-4 to the average qualifying assets, capped at total interest incurred for that system in the period. Because part of the system is already in service earning revenue, only the accumulated expenditures exceeding the fraction in 922-360-35-3 of total estimated system cost qualify.

Key points (6)

Interest capitalized during the prematurity period is computed by applying an interest capitalization rate determined under 835-20-30-3 through 30-4 to the average amount of qualifying assets for the system (835-922-25-1).
The amount of interest capitalized cannot exceed the total interest cost actually incurred by the cable television system in that period (835-922-25-1).
Qualifying assets are determined under 835-20-30-5 and 835-20-25-5; the qualifying portion equals accumulated expenditures in excess of the fraction specified in 922-360-35-3 of the total estimated cost of the system at the end of the prematurity period (835-922-25-1).
The portion of the system already in use in the entity's earnings activity during the prematurity period is not eligible for interest capitalization (835-922-25-1).
Under 835-20-25-5, for assets completed in parts that can be used independently, interest capitalization stops on each part when it is substantially complete and ready for use, so not all interest incurred during the prematurity period is eligible for capitalization (835-922-25-2).
The Subtopic follows the same scope and scope exceptions as Section 922-10-15 (835-922-15-1).

For students. The trap here is assuming all interest incurred during the prematurity period gets capitalized — it does not, because the portion of the cable system already in service is treated as substantially complete and ineligible; only expenditures above the 922-360-35-3 fraction of total estimated cost are qualifying assets.

capitalized interest prematurity period qualifying assets interest capitalization rate cable television system assets completed in parts accumulated expenditures

Machine-generated study aid for ASC 835-922. Check the source paragraphs below.

835-922-05Overview and Background

Source downloaded: 2026-09-10T01:50:34.120Z.Record version 529f2acf88cd. Effective date must be checked in the source.

835-922-05-1

This Subtopic provides guidance on the accounting for interest costs incurred by an entity in the cable television industry during the period of construction of the cable system.

835-922-15Scope and Scope Exceptions

Source downloaded: 2026-09-10T01:50:35.976Z.Record version 6f09fecbe8dc. Effective date must be checked in the source.

Overall Guidance

835-922-15-1

This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 922-10-15.

835-922-25Recognition

Source downloaded: 2026-09-10T01:50:42.248Z.Record version 393b095477f5. Effective date must be checked in the source.

Prematurity Period—Interest Cost Capitalization

835-922-25-1

The amount of interest cost that is capitalized during the prematurity period shall be determined in accordance with Topic 835 by applying an interest capitalization rate determined in accordance with paragraphs

835-20-30-3 through 30-4

to the average amount of qualifying assets for the system during the period. Qualifying assets shall be determined in accordance with the guidance in paragraphs 835-20-30-5 and 835-20-25-5. The amount of interest cost capitalized shall not exceed the total amount of interest cost incurred by the cable television system in that period. During the prematurity period, a portion of the system is in use in the earnings activity of the entity and is not eligible for interest capitalization. The portion of the cost of the system that represents a qualifying asset is the amount of accumulated expenditures in excess of the fraction specified in paragraph 922-360-35-3 of the total estimated cost of the system at the end of the prematurity period.

835-922-25-2

Paragraph 835-20-25-5 states that for assets completed in parts, and where each part is capable of being used independently while work is continuing on other parts, interest capitalization shall stop on each part when it is substantially complete and ready for use. Therefore, that guidance prohibits capitalization of interest cost on the portion of the cable television system that is substantially complete and ready for its intended use. Accordingly, this Topic clarifies that all interest cost incurred during the prematurity period is not necessarily eligible to be capitalized.