When a Firm Constructs Its Own Buildings or Equipment

Multiple Choice

When a firm constructs its own buildings or equipment:

A) it recognizes the labor, material, and overhead costs incurred as an asset.
B) U.S.GAAP and IFRS require firms to include, or capitalize, interest costs during construction in the cost of a self-constructed asset.
C) it recognizes the labor, material, and overhead costs incurred as a period expense.
D) U.S.GAAP and IFRS require firms to expense interest costs incurred during construction of a self-constructed asset.
E) both choices a and b are correct.