Which interest costs should be capitalized, Accounting Standards

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Which interest costs should be capitalized

Response to the following problem:

A company borrows money at 10 per cent interest in order to finance the building of a new factory. Suggest arguments for and against the proposition that the interest costs should be capitalized and regarded as part of the ‘cost' of the factory. Which set of arguments do you prefer?

Support your answer using a minimum of two professional or academic sources.

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Accounting Standards: Which interest costs should be capitalized

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