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capitalize or expense

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › capitalize or expense

  • This topic has 3 replies, 2 voices, and was last updated 10 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • November 6, 2014 at 5:32 pm #208058
    buitrago
    Participant
    • Topics: 1
    • Replies: 3
    • ☆

    Building & Construction Company” (homebuilding)
    so when they develop a new project,Example 20 houses (all together in the same land) the develop as well a showroom ,so the sales people can promote and sales the new houses,late when they sold all the houses they dismantlement the showroom ,sometime if the project is big example 100 houses they rent a showroom o sales room in the high street o in shopping center to sale de houses .
    My question is about the expenditure of the showroom, is capitalize or expense.
    The showroom is part of the project ,but as well is part of marketing and publicity strategy
    I understand marketing and publicity strategy are expenses , I cant not capitalized
    But Im not sure if Im right , or I can capitalized some expenditure to the project because the need as well refurbishing the showroom.

    November 6, 2014 at 5:53 pm #208076
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23307
    • ☆☆☆☆☆

    My instant reaction is that they should be expensed as incurred.

    March 10, 2015 at 3:15 pm #231900
    buitrago
    Participant
    • Topics: 1
    • Replies: 3
    • ☆

    Sorry to bother you again, I would appreciate if you can help me, normally a treat the publicity as expensed to P&L
    But if the publicity is necessary for the building company to sell the apartments, Can I consider part of this publicity as cost of inventory, if I can which IFRS o IAS I can support this concept

    March 10, 2015 at 8:02 pm #231923
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23307
    • ☆☆☆☆☆

    I wouldn’t have thought that would be appropriate. Surely the publicity is a selling expense

    Ok?

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