Under AASB 116 if an item of property,plant and equipment is acquired for cash,the cost includes:

Question

Quizplus · Accepted Answer

According to AASB 116, when an item of property, plant, and equipment is acquired for cash, the cost includes the purchase price after deducting trade discounts and rebates and any directly attributable cost of bringing the asset to its working condition for its intended use, which may include importing duties if any. Therefore, the correct choice is E, as it includes both A and C. The insurance premium paid to cover the asset for the first 12 months of its life is not a directly attributable cost of bringing the asset to its working condition, and hence it is not included in the cost of the asset under AASB 116.

Under AASB 116 If an Item of Property,plant and Equipment