Interest

. Finance: A fee paid for the use of another party’s money. To the borrower it is the cost of renting money, to the lender the income from lending it.
Interest on all debt is normally deductible before taxes are assessed on a company’s income. Corporate legislation requires disclosure of interest payable on loans, and companies often show a single interest figure in the income statement while providing details in a note that may also include netting out of interest received or some other adjustments. In cost accounting, interest is normally excluded from cost computations on the grounds that (being a payment for capital) it is equivalent to dividend, and hence is a finance item and not a cost item.

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