Interest, ASC 835

Interest related topics

835-20: Capitalization of interest

For certain qualifying assets, interest costs are capitalized
–> and included in determining the acquisition cost of asset

835-30: Imputation of interest

For notes exchanged for cash or other assets
1. If face amount of the note > cash or fair value of the asset
–> the difference is discount

2. If face amount of the note < cash or fair value of the asset
–> the difference is premium

3. discount or premium is amortized using “interest method”

320-10-35: Interest income from investments
–> Interest income is recognized in earnings

470-10-35: Interest cost of debt
–> Interest cost is recognized using interest method

 

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