How Capitalized Interest Rate Attributes Work Together

Capitalized interest rates represent interest types that are used for capitalizing costs. The application calculates and capitalizes interest on construction-in-progress costs based on the attributes you define for a capitalized interest rate.

Capitalized Interest Rate Attributes

Define the following key attributes for a capitalized interest rate:

Capitalized Interest Rate Attributes	Description
Expenditure Type	Specifies the type of interest transaction that the rate generates.
Expenditure Organization Source	Specifies the expenditure organization source for the generated capitalized interest transactions.
Threshold	Note: All threshold specifications must be met before capitalized interest is calculated. Determines when projects with the capitalized interest rate are eligible for interest calculation. Thresholds are defined for a business unit and capitalized interest rate combination. A rate can have more than one business unit but the threshold that you define is specific to a business unit. You can specify any combination of the following threshold settings: Amount Type: Determines if a project is eligible for capitalized interest. The available options are: Budget, Total Construction-in-Progress, and Open Construction-in-Progress. If the amount type is budget, then select the budget type or plan type to define cost budget amounts. Project Amount: Specifies the project threshold amount. If you use the threshold amount type Budget and a budget is not defined for a project, then the project is ineligible for interest calculation. Project Days: Specifies the number of days from the project start date at which the project is eligible for capitalized interest calculation. Task Amount: Task threshold amount. Similar to project amount, if the amount type is budget, and a budget is not defined for a project, then the project is ineligible for interest calculation. Task Days: Number of days from the task start date at which the task is eligible for capitalized interest calculation.
Current Period Calculation Method	You can control the construction-in-progress balance on which interest is calculated by specifying current period calculation method and excluded expenditure types. The current period calculation method specifies how much of the current period construction-in-progress costs are included in the construction-in-progress balance.
Interest Method	Specify if interest must be calculated on a simple or compound basis.
Basis Method	Determines if interest amounts are spread evenly across accounting periods or are derived based on the number of days in each accounting period.
Excluded Expenditure Types	You can exclude one or more expenditure types from the construction-in-progress costs basis for a business unit to calculate capitalized interest.