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Oracle® Fusion Applications Project Management Implementation Guide
11g Release 5 (11.1.5)
Part Number E20384-05
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37 Project Costing Configuration: Define Capitalized Interest

This chapter contains the following:

Capitalized Interest Setup: Explained

Capitalized Interest Rate Schedule Components: How They Work Together

Setting Up Capital Projects for Calculating Capitalized Interest: Points to Consider

FAQs for Define Capitalized Interest

Capitalized Interest Setup: Explained

To set up capitalized interest, you must specify the following capitalized interest options to calculate and capitalize interest on construction-in-progress costs.

Capitalized Interest Rate Schedule Components: How They Work Together

Capitalized interest rate schedules help you maintain the interest rates at the organization level. If the capitalized interest rate is not defined for the organization, the application automatically uses the next higher-level organization in the organization hierarchy.

Capitalized Interest Rate Schedule Components

The following components work together to define a schedule for capitalized interest rates. Provide the rate schedule attributes and then build new multipliers for the version to take effect. You can assign the interest rate schedule to a project type and allow the override of the assigned capitalized interest rate schedule at the project level.

Rate Schedule Components


Default Organization Hierarchy

Organization hierarchy to assign rates to organizations. If there is no rate for an organization, the capitalized interest calculation uses the rate for the next higher-level organization in the organization hierarchy.

Hierarchy Version

The default version of the organization hierarchy to be applied to the schedule.

Hierarchy Start Organization

Start organization to indicate which branch of the organization hierarchy is used as the top of the hierarchy for assigning capitalized interest rates to organizations.

Hold from Build

Select this option to prevent the rate schedule version from being built, if version is not yet ready for the build.

Rate Multipliers

Specify rate multiplier for an organization and capitalized interest rate combination. Optionally, copy multipliers from other schedule version to this version and use it.


To delete an interest rate schedule, you must build the schedule and then delete it.

Setting Up Capital Projects for Calculating Capitalized Interest: Points to Consider

To correctly calculate capitalized interest, ensure that correct capitalization options are defined at the project type, project template, and project levels. At the project level, verify the following:

Allowing Capitalized Interest for a Project

Indicate whether the project is eligible for capitalized interest. By default, this option is enabled for all capital projects. However, you can update the option as required.

Selecting a Capital Interest Schedule and Capital Interest Stop Date

Capitalized interest rate schedules to define rates of interest calculation for each organization. The default interest schedule is inherited from the project type. You can override it if the project type allows schedule changes at the project level.

FAQs for Define Capitalized Interest

What's a capital interest stop date?

Date that determines the accounting period up to which capital interest is calculated for a project or task.

For example, assume the stop date for your project is December 27, 2010 and your accounting periods are weekly. That is, the stop date falls in the fourth period of December. In such a case, capital interest is calculated only up to the third period in December 2010.