The other night I was giving Rachel some highlights from my
day. At one point I mentioned something like: "I found money that we can
include in our company’s annual budget! It’s related to capitalized interest
income. It’s very arcane and difficult to explain but I can try. Are you
familiar with it?”
Rachel: “Well no, not really. I’ve never worked with it… But…
I know that it’s the interest you would charge for your capital projects by multiplying
the accrued spend by either the company’s LT debt rate or an appropriate third-party
benchmark interest rate. And that as the interest income is accrued at the
corporate entity, it is offset by a balance sheet entry at the BU level. And
that once the project is placed into service it would depreciate along with the
underlying asset over its useful life.”
Rob: [moment of silence, mouth slightly ajar] “Are you
freaking kidding me!? You’ve never touched capitalized interest in all of your
years of accountancy, and yet you still manage to give the best, clearest and
most comprehensive explanation of anyone I’ve come across? You truly are a brilliant
corporate CPA.”
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