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Preheat the oven to 350°F. Grease two 8" round cake pans.
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To make the cake: Whisk together the flour, baking powder, and salt; set aside. In a large mixing bowl, beat together the butter, sugar, and coconut flour until well blended, 2 to 3 minutes.
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Mix in the vanilla and coconut flavor. Add the eggs one at a time, mixing well after each addition.
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Add the flour mixture and milk alternately to the bowl, starting and ending with the flour. Scrape the bowl and mix again briefly, to fully combine. The batter will look a little curdled; that's OK.
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Divide the batter evenly between the pans. Smooth the tops with a spatula. Bake the cake for 38 to 42 minutes, or until the edges are just beginning to pull away from the sides of the pan, and the top is lightly golden. A toothpick inserted in the center will come out clean.
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Remove the cakes from the oven and allow them to cool for 5 minutes. Run a spatula or knife around the edges, then turn them out onto a rack to cool completely.
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To make the frosting: Combine the heavy cream and mascarpone in a large bowl and whisk at low speed until the mixture is smooth and slightly thickened. Slowly add the coconut flavor and confectioners’ sugar. Increase the speed to medium-high and whisk until medium peaks form.
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To assemble: Place one cake layer on a serving plate. Spread with 1/4 of the frosting. Place the other layer on top; spread the top and sides with the rest of the frosting, piping decorations if desired. Sprinkle toasted coconut over the top and sides.
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Refrigerate the cake until ready to serve; store any leftovers in the refrigerator.