IAS 16

Are you kidding me? What is the cost of the asset? And how much does the bank charge for wiring the money? Are we talking material amounts here?

no mike i am not kidding you. obviously i know the amount is not material compared to the cost of the asset. i am asking because of the principle of the situation and in my experience i have seen it been allocated to both the expense and asset so i was wondering which is correct......when i become an accountant , i would like to know that i'm doing the correct thing whether the amount is material or not.

If it's immaterial, and it almost certainly will be, the "correct" thing to do is whatever you want - because it's immaterial! Many companies have a policy not to capitalise capital expenditure below a certain amount - it could be 100, 1,000, 10,000 or whatever. If you are currently employed, it is almost certainly the case that your employer does not capitalise, for example, the cost of a replacement calculator nor the cost of batteries that, when fitted, will extend the useful life of the calculator. The whole concept of materiality and "it doesn't matter what you do because it's immaterial" is there because ..............well, because ......... it's immaterial Where your bank charges you for each payment that you make to your suppliers, are you intending to add those bank charges to the cost of sales as being a necessary expense incurred in bringing those purchases to their present location and condition? Nari, it wouldn't matter if you allocated the bank's wiring charges to the Electricity Account or Advertising Account or Snow White and the Seven Vertically Challenged People Account. You can debit the amount anywhere you want and that will be ok. But, if you wish to be strictly correct, I suggest a debit entry in the Finance Charges Account would be most appropriate Ok?

ok, thanks mike.

You're welcome