FR Question 1

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Question 1: IAS 16 Property, Plant and Equipment requires an asset to be measured at cost on its original recognition in the financial statements. EW used its own staff, assisted by contractors when required, to construct a new warehouse for its own use.
Identify whether the costs listed below should be capitalised or expensed.

Capitalise Expense

Time left =
Answers Capitalize Expense
Clearance of the site prior to commencement of construction
Professional surveyor fees for managing the construction work
EW’s own staff wages for time spent working on construction
A proportion of EW’s administration costs, based on staff time spent X


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