HINT:
If income tax is paid at the time of making payment for the acquisition of any long term asset especially described in the IAS 16 on Property, Plant and Equipment. As we know that income tax paid before the final assessment (therefore, considered as advance tax) is adjustable against the final tax liability. Therefore, any such income tax adjustable (refundable) cannot be added to the cost of the items categorized under IAS 16 as long term asset.
ANSWER:
Capitalization with respect to its IAS – 16 means, the collection of all the costs incurred to bring a certain element of "Property, Plant and Equipment" to its present condition. e. g, if we purchase a Super Computer for Rs. 10,000,000 (just for Example) and incur Rs. 500,000 on its loading, unloading and carriage, and Rs. 800,000 on its installation on the desired place. The total cost incurred to get the Super Computer in to working condition comes to Rs. 11,300,000 and not the Rs. 10,000,000. The addition COST related to carriage and installation is termed as capitalization. And now the Super Computer will be reported in the balance sheet as an asset at Rs. 11,300,000.
On Tue, Nov 15, 2011 at 3:21 PM, ROMA virani <virani.1990@gmail.com> wrote:
is ka solution send kreOn Tue, Nov 15, 2011 at 6:21 PM, ROMA virani <virani.1990@gmail.com> wrote:
mgt 401 ki gdb send kre plzDiscussion Question:
Howard pharmaceutical Inc. is planning to install a new plant at its production facility which will increase production capacity to the tune of 40% of the existing capacity. They appointed their production manager - Mr. Engineer to select, purchase and install the new plant. Which of the following costs of Howard Pharmaceutical Inc. can be capitalized for the new plant in accordance with IAS 16 – Property, Plant & Equipment?
1. Cost of the plant (inclusive of income tax Rs. 200,000)
2. Initial delivery and handling costs
3. Cost of site preparation
4. Consultants hired for advice on the acquisition of the plant
5. Interest charges paid to supplier of plant for deferred credit
6. Estimated dismantling costs to be incurred after 7 years
7. Operating losses before commercial production
8. Misc. Administrative Expenses
Rs.
2,700,000
200,000
600,000
700,000
200,000
300,000
400,000
75,000
On Tue, Nov 15, 2011 at 6:20 PM, ROMA virani <virani.1990@gmail.com> wrote:
On Tue, Nov 15, 2011 at 6:19 PM, ROMA virani <virani.1990@gmail.com> wrote:
plz is ka solution beje aj last date hai gdb kaOn Tue, Nov 15, 2011 at 5:04 PM, Muhammad Afaaq <afaaqtariq233@gmail.com> wrote:
Asslam O AlikumFin 630 bundles of solved quiz # 01, 02, 03 & 04 by me afaaq when me in mba 4th :-)
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Islamabad
Afaaq_Tariq@yahoo.com0346-5329264
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Remember Me in Your Prayers
Best regard's
Ch. Muhammad Afaaq (Arrien)
MBA (Finance) Completed
Islamabad
Afaaq_Tariq@yahoo.com
0346-5329264
For latest assignments solved quizzes files GDB, Solve & Unsolved Past Papers come join us in
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If u like me than raise your hand with me
If not then raise ur standard
That's about me … !
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