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Initial cost

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Initial cost

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  • January 30, 2023 at 5:47 pm #677649
    Not9ce
    Participant
    • Topics: 1
    • Replies: 0
    • ☆

    I would like to know if pre- production testing part of initial cost of asset in the IAS 16, property plant and equipment

    January 30, 2023 at 8:07 pm #677651
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7149
    • ☆☆☆☆☆

    Hi,

    No, it isn’t. We can only capitalise the costs in brining the asset to its working condition for intended use. If we are able to produce the goods as part of testing then the asset is working as intended and so the costs cannot be capitalised.

    Thanks

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