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Hi sir
1) Agent fees
2) legal fees
3) professional fees
Should they been capitalized or expensed?
plz state the reasons
Thank u v much
There is no rule based on the label “agent”, “legal” or “professional” alone and professional fees could be for legal services – so 2 is just an example of 3.
It depends on what it was that the fees were incurred.
For example:
1) Professional fees that are directly attributable to the acquisition or self-construction of an item of property should be included in the cost of the property per IAS 16 (i.e. capitalised).
2) A fee paid to an agent to arrange a lease would be capitalised under IFRS 16 – unless the lease was short-term (less than 12 months), in which case it would be expensed.
3) Legal fees in connection with litigation would be expensed.
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