If a second-hand machine is purchased for productive use in a business,all renovation and repair costs on the used machine incurred by the purchaser prior to its productive use should be reported as part of the asset's cost on the balance sheet.

Question

Quizplus · Accepted Answer

Renovation and repair costs incurred on a used machine before its productive use should be added to the cost of the asset and reported on the balance sheet as the total cost of the asset. This ensures that the cost of the used machine reflects its true value after any necessary repairs or renovations have been made.

If a Second-Hand Machine Is Purchased for Productive Use in a Business,all