IAS 2 Inventories

Greetings sir,
Could please help me with this question?

Equipment constructed for a customer for an agreed price of $18000. This has recently been completed at the cost of $16800. It has now been discovered that, in order to meet certain regulations, conversion with an extra cost of $4200 will be required.The customer has accepted partial responsibility and agreed to meet half the extra cost.

My question is that how do we treat the conversion cost in this example?
1) Do we deduct it from the agreed price of $18000, which will bring NRV to $15900(1800-2100)? Then, answer will be 15900

2) Or do we add it to the total cost so it will $18900(16800+2100) and then answer will be $18000 as it is lower than the cost

Thanks!