Business Administration - Accounting & Financial Planning ACC220 Chapter Notes -John Wiley & Sons, International Financial Reporting Standards, Intangible Asset
Document Summary
The invoice cost, the cost of the safety inspection, and the cost for the required logo painted on the vehicle are capitalized, as they are required costs to put the vehicle into use. Land improvements are structural additions made to the land such as parking lots and fences. Clearing and grading the land are not land improvements but are part of the land cost as they are required to get the land ready for its intended use. The purchase cost must be split between the land and building because the building is depreciated and the land is not. In addition, the cost of each item will be needed to determine any gain or loss on disposal if either one is later sold. Justine"s arguments are somewhat valid, with respect to more useful information being provided when using the revaluation model.
