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P2-D2.
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maximus07
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I read that professional fees are capitalized. While my teacher told me training cost of staff is not capitalized.
Are they both different?
P2-D2
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Hi,
Yes, they are both different and the treatment you have been told is correct. Professional fees will be say solicitor fees or architect fees, and they are directly attributable to the purchase of the asset hence capitalised.
The staff training costs are expensed as they are not directly attributable to the purchase, they are additional costs incurred in order to be able to operate the asset and the knowledge of the operation by staff is not something that we can control as they can easily leave the business and take that knowledge elsewhere.
Thanks
maximus07
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