Question: As noted in Chapter 7 interest incurred while assets to
As noted in Chapter 7, interest incurred while assets to be used for governmental activities are being constructed should not be capitalized. Does the same rule apply to assets to be used for business-type activities? Suppose that the assets used for business-type activities were ﬁnanced with general obligation bonds. Should the construction period interest be capitalized? What if assets used in an enterprise fund on which interest has been capitalized are transferred from that fund to be used for government activities? Should the capitalized interest be removed?
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