Question

The acquisition cost of a plant asset does not include: A) incidental costs, such as title fees, sales commissions, legal fees, and so on. B) repair costs resulting from damage to the plant asset while it was being unpacked. C) all normal and reasonable expenditures necessary to get the asset in place and ready for its intended use. D) costs incurred to modify or customize the new plant asset.

Answer 1

Answer:

B) repair costs resulting from damage to the plant asset while it was being unpacked.

Explanation:

In terms of IAS 16, cost of a Property, Plant and Equipment Item include the Purchase cost and any other costs directly incurred in placing the asset in the location and condition intended for use by management.

All other costs above are costs directly incurred to place the Plant asset in location and condition intended for use by management except repair costs resulting from damage to the plant asset while it was being unpacked.