Cost not qualifying for recognition (expensed immediately)

1) Opening a new facility

2) Introducting new product or service, including advertising and promotion
3) Conducting business in a new location or with new class of customer, including staff training cost
4) Administration & other general OH costs
5) Costs incurred while an item capable of operating in the manner intended by mgt has yet to be brought
into use or is operated at less than full capacity
6) Initial operating losses
7) Relocating/reorganizing part or all of an entity’s operations

Measurement after recognition

1)Cost model- carried at cost less any accumulated depreciation and any accumulated impairment loss
2) Revaluation model- fair value at the date of revaluation less any subsequent accum.depreciation and
subsequent accum. impairment loss

Acquisition of property
1) Cash basis
Cost= cash price equivalent @ the recognition date
including cash paid + directly attributable costs (freight, installation, other
cost necessary bringing the asset to location & condition for intended use)
*If acquired @ basket price or lump-sum- allocate on the basis of relative Fair Value

2) On Account basis
Cost=invoice price less discount, regardless of whether discount is taken or not
*If discount is not taken, charged to purchase discount lost-other expense
*Cash discounts- reduction of cost, not as income

3) Installment basis
Cost= when payment for item of PPE is deferred beyong normal credit terms,
cash price equivalent
*If asset is offered at cash price and@ an installment price , CASH PRICE
*Excess of installment price over cash price- interest amortized over credit period
*If no available cash price- PV of all payments using implied interest rate

4) Issuance of Share capital

Order of priority: 1)Fair value of property received
2) Fair value of the share capital
3) Par value or stated value of the share capital

5) Issuance of Bonds payable- FV + transaction costs directly attributable

Order of priority: 1) Fair value of bonds payable
2) Fair value of asset received
3) Face amount of bonds payable