- This topic has 1 reply, 2 voices, and was last updated 10 years ago by
.
- Posts
Hi,
I’m reading the 2013 version of the BPP Learning Media Study Text for F3, on page 147 under Chapter 9 – Tangible Non-Current Asset, Section 3.4 Components of cost, it says,
“IAS 16 lists the components that make up the cost of an item of property, plant and equipment as follows,
Purchase price, including any import duties paid, but excluding any trade discount and sales tax paid”.
I can see the logic to include import duties paid and to exclude trade discount, but why exclude sales tax paid?
I thought sales tax paid should be included and this could be an error in the study text.
I think it will usually be excluded because with cases such as VAT the tax is refundable to the organisation and therefore it would make no logical sense to capitalise this component in the accounts.I think you are right that if it is a non-refundable sales tax it should be included as part of the cost of the asset.
- You must be logged in to reply to this topic.