Capitalized Interest

The Company capitalizes interest costs to land under development during the active development of finished lots. In addition, the Company capitalizes interest costs to its joint venture investments while the investments are considered qualified assets pursuant to ASC 835-20, Interest. Capitalized interest is transferred to sold or unsold inventory as the development of finished lots is completed, then charged to cost of sales upon the Company’s settlement of homes and the respective lots. Interest incurred in excess of the interest capitalizable based on the level of qualified assets is expensed in the period incurred.

NVR’s interest costs incurred, capitalized, expensed and charged to cost of sales during the years ended December 31, 2017, 2016 and 2015 was as follows:



	December 31,
	2017			2016			2015
Interest capitalized, beginning of year	$	5,106		$	4,434		$	4,072
Interest incurred	26,384			25,951			25,155
Interest charged to interest expense	(24,185		)	(21,707		)	(23,559		)
Interest charged to cost of sales	(1,722		)	(3,572		)	(1,234		)
Interest capitalized, end of year	$	5,583		$	5,106		$	4,434