chancornelius
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- Feb 13, 2016
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Why capitalized interest from construction in progress is added back for adjusted interest expense but not adjusted EBIT?
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On a different topic, if converting a lease from operating lease to capitalized lease, why we calculate the new interest expense as total finance lease * discount rate + original lease, I might have forgotten something basic but not sure why we treat the depreciation as interest….S2000magician wrote:
There’s no adjustment to make to EBIT. EBIT’s before interest, and there’s no depreciation because the construction is in progress.
Please make a new thread for this topic, so that this thread doesn’t get derailed.h21 wrote:
On a different topic, if converting a lease from operating lease to capitalized lease, why we calculate the new interest expense as total finance lease * discount rate + original lease, I might have forgotten something basic but not sure why we treat the depreciation as interest….S2000magician wrote:There’s no adjustment to make to EBIT. EBIT’s before interest, and there’s no depreciation because the construction is in progress.