5.	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 Accounting Standards Codification 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 three and six months ended June 30, 2016 and 2015 was as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Interest capitalized, beginning of period	$	5,358		$	4,271		$	4,434		$	4,072
Interest incurred		6,397			6,262			12,785			12,525
Interest charged to interest expense		(4,814	)		(5,956	)		(9,902	)		(11,874	)
Interest charged to cost of sales		(2,365	)		(245	)		(2,741	)		(391	)
Interest capitalized, end of period	$	4,576		$	4,332		$	4,576		$	4,332

During the quarter ended June 30, 2016, the Company expensed to cost of sales approximately $1,500 of capitalized interest related to the land parcel under development which was sold during the quarter as disclosed in Note 4.