Real Estate Glossary

Capitalized Interest

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Richard Wilson
Written by Richard Wilson

Instead of being paid current each month, capitalized interest is a method wherein construction loan interest amounts are charged but allowed to accumulate or accrue and be added to the total loan principal balance. Therefore, those capitalized interests show up as installments in a company’s income statement during a recurrent depreciation expense recorded based on an associated long term asset over its lifetime.

Instead of being paid current each month, capitalized interest is a method wherein construction loan interest amounts are charged but allowed to accumulate or accrue and be added to the total loan principal balance. Therefore, those capitalized interests show up as installments in a company’s income statement during a recurrent depreciation expense recorded based on an associated long term asset over its lifetime.

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Richard Wilson

Richard Wilson

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