Which costs of an item of property, Plant and Equipment (PPE) can NOT be capitalised as per AS-10 ? (A)…
According to Accounting Standard 10 (AS-10 / Ind AS 16) on Property, Plant and Equipment (PPE), purchase price (D) and directly attributable costs of bringing the asset to…
Choose your answer
Which costs of an item of property, Plant and Equipment (PPE) can NOT be capitalised as per AS-10 ?
(A) Inauguration costs or any other costs in connection with opening a new facility or business.
(B) Costs of conducting business in a new location or with a new class of customer (including costs of staff training)
(C) Cost of advertising, promotional activities costs and any other costs incurred in connection with introducing a new product or service.
(D) Purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rates.
(E) Any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management.
Answer and explanation
Correct answer B
According to Accounting Standard 10 (AS-10 / Ind AS 16) on Property, Plant and Equipment (PPE), purchase price (D) and directly attributable costs of bringing the asset to working condition (E) are capitalized. Inauguration costs (A), costs of conducting business in a new location or staff training (B), and advertising/promotional costs (C) cannot be capitalized as part of PPE.
Practice for these exams
-
UGC NET Management