Question

Which of the following items are capitalized along with the purchase price of the fixed asset?

• A. Import duties
• B. Initial delivery and handling costs
• C. Trade discounts
• D. (A) and (B)

Answer 1

The correct option is D (A) and (B)

Initial delivery and handling costa and trade discounts are capitalized along with the purchase price of the fixed assets.

All the cost incurred to bring the machinery in state of being used or to put machinery to use are included in the cost of machinery and discount received is reduced from the cost of the asset.