Under AASB 102 Inventories, items of inventories that are used by business enterprise as components in a self-constructed property asset are required to be:
A) aggregated into the 'cost of goods sold' expense in the period in which the items are used.
B) expensed directly into equity in the period in which the items are used.
C) capitalised and depreciated.
D) added to a 'property construction' provision account.

Question

Quizplus · Accepted Answer

According to AASB 102, items of inventories that are used by a business enterprise as components in a self-constructed property asset should be capitalized and depreciated as a part of the cost of the property asset. Therefore, option C is the correct choice. Options A, B, and D are incorrect as they do not follow the requirements of AASB 102.

Under AASB 102 Inventories, Items of Inventories That Are Used