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Capitalized Interest

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Capitalized interest
Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing.

Capitalized Interest
Funds that an issuer places into a separate account in order to pay for future coupons on a bond. Capitalized interest is considered an asset and may be deducted from the issuer's taxes over time. There is disagreement about the benefits of this deduction; some issuers prefer to receive the deduction at once, rather than over time.


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If the enterprise acquires the asset for its own use, the capitalized interest is expensed through the depreciation process.
General Resolution Project bond proceeds will be used to (1) finance certain capital improvements to Project Four, (2) refund certain tax-exempt commercial paper notes issued for the general resolution projects, (3) fund capitalized interest on the general resolution projects bonds, and (4) pay the costs of issuance.
The capitalized interest account was funded at closing with $20.
 
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