critical accounting issue in these instances is identifying the cost of the
self-constructed asset. The task is more difficult than for purchased assets
because there is no external transaction to establish an exchange price.
Actually, two difficulties arise in connection with assigning costs to
self-constructed assets: (1) determining the amount of the company's indirect
manufacturing costs (overhead) to be allocated to the construction and (2)
deciding on the proper treatment of interest incurred during construction.