when capitalizing long-lived asset: there is not increase to liability, is it? when capitalize interest expense, will it increase both asset and liability? or just asset? and interest expense will be charged in the form of which of cost? Thanks.
Correct – capitalizing an asset increases assets and equity, not liabilities (provided the asset was acquired outright and not via capital lease). Interest expense is not capitalized as a stand-alone item, it is incorporated into the capitalized value of the asset.