. Capitalization of Interest

We capitalize interest to inventories during the period of development in accordance with ASC Topic 835,

Interest

(“ASC 835”). Homebuilding interest capitalized as a cost of inventories is included in cost of sales as related units or lots are delivered. To the extent our homebuilding debt exceeds our qualified assets as defined in ASC 835, we expense a portion of the interest incurred. Qualified homebuilding assets consist of all lots and homes, excluding finished unsold homes or finished models, within projects that are actively selling or under development. The table set forth below summarizes homebuilding interest activity.

The homebuilding interest expensed in the table below relates to the portion of interest incurred where our homebuilding debt exceeded our qualified inventory for such periods in accordance with ASC 835.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
	(Dollars in thousands)
Homebuilding interest incurred	$	13,106		$	13,305		$	26,324		$	26,556
Less: Interest capitalized		(13,106	)		(13,305	)		(26,324	)		(26,556	)
Homebuilding interest expensed	$	-		$	-		$	-		$	-

Interest capitalized, beginning of period	$	79,783		$	79,991		$	77,541		$	79,231
Plus: Interest capitalized during period		13,106			13,305			26,324			26,556
Less: Previously capitalized interest included in home and land cost of sales		(15,739	)		(14,439	)		(26,715	)		(26,930	)
Interest capitalized, end of period	$	77,150		$	78,857		$	77,150		$	78,857