ACC 304 Course Great Wisdom / tutorialrank.com ACC 304 Course Great Wisdom / tutorialrank.com | Page 95

10. Avoidable interest is the amount of interest cost that a
company could theoretically avoid if it had not made
expenditures for the asset.

11. When a company purchases land with the intention of
developing it for a particular use, interest costs associated
with those expenditures qualify for interest capitalization.

12. Assets purchased on long-term credit contracts should
be recorded at the present value of the consideration
exchanged.

13. Companies account for the exchange of nonmonetary
assets on the basis of the fair value of the asset given up or the
fair value of the asset received.