Which of the following items is not considered capitalisable cost of property,plant and equipment?
A) Freight costs
B) Import duties
C) Trade discount
D) Installation costs
E) None of the given answers

Question

Quizplus · Accepted Answer

Trade discount is a reduction in the price of goods or services offered by the supplier to the buyer as a reward for their long-term or large-scale business. It is not a cost incurred in acquiring or constructing property, plant, and equipment and therefore cannot be capitalized. Conversely, freight costs, import duties, and installation costs are all directly attributable to acquiring or constructing a property, plant, or equipment, and hence they are capitalizable.

Which of the Following Items Is Not Considered Capitalisable Cost