The capitalized cost of the eq

Historical cost
Freight costs
Insurance while in transit
Installation costs
Testing
State sales tax
Total
The capitalized cost of the equipment:
Historical cost $ 365,000
Freight costs $ 5,600
Insurance while in transit $ 800
Installation costs $ 2,000
$ 700
State sales tax $ 29,200
$ 403,300
Cost of closing factory X, including the
This cost should be expensed as it is rela

Cost of feasibility study carried out by

This cost should also be expensed as it is
not result in the creation of an asset

Cost of relocating key staff to the town

This cost should be expensed as it is rela

Cost of implementing the new system i

These fees should be expensed as they ar

Allocation of time spent by internal em

This cost should also be expensed as it re

Training for new staff:

This cost should be expensed as it is incu

Efficiency losses in early production st

These losses should be expensed as they
and do not provide future economic bene

Campaign specially to advertise the ne

This cost should be expensed as it is rela
osing factory X, including the cost of terminating existing contracts and redundancy payments for staff:
should be expensed as it is related to the closure of the factory and does not provide any future economic benefits.

easibility study carried out by external consultants to determine the best system for factory Z:
should also be expensed as it is incurred to obtain information about the best system and does
in the creation of an asset

elocating key staff to the town where factory Z is located:

should be expensed as it is related to the relocation of staff and does not generate future economic benefits.

mplementing the new system in factory Z. Consulting fees:

s should be expensed as they are related to obtaining professional services to implement the new system

n of time spent by internal employees:

should also be expensed as it represents the internal resources used for the implementation

for new staff:

should be expensed as it is incurred to provide training for the new staff members.

y losses in early production stages:

ses should be expensed as they are a result of the initial phase of production
t provide future economic benefits

n specially to advertise the new technology being used

should be expensed as it is related to advertising and promoting the new technology.
1. PPEs
Because the apartment held for use in sup
2. Investment property
Key word: let to your tenants
3. PPEs
Key word: run a hotel
Because the hotel held for administrative
4. Investment property
Key word: to sell it later or develop som
Because land held for long-term capital a
5. Investment property
Key word: plan to sublet these offices
Because the building held for capital app
6. PPEs and Investment property
20 Offices -> PPEs
Key word: consulting business
Because it held for services
30 Offices -> Investment property
Key word: to ternants
7.
The property will appear as an investmen
parent company accounts
he apartment held for use in supply services, rental and administrative purpose
ment property
: let to your tenants

: run a hotel
he hotel held for administrative purpose, rental and for use supply services
ment property
: to sell it later or develop some property on it
and held for long-term capital appreciation
ment property
: plan to sublet these offices
he building held for capital appreciation and rental
and Investment property

: consulting business
t held for services
s -> Investment property
: to ternants

erty will appear as an investment property in the subsidinary company accounts and as a PPEs in the
mpany accounts