On initial recognition of property, plant and equipment, the cost only comprises the purchase price plus an initial estimate of dismantling and/or restoration costs.

Question

Quizplus · Accepted Answer

On initial recognition, the cost of property, plant, and equipment includes the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

On Initial Recognition of Property, Plant and Equipment, the Cost