Question

13.Installation and carriage expense are added to the value of machine due to *

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Answer 1

Answer:

Expenditure incurred upto the date at which the asset becomes ready to commence commercial production (i.e., production intended for sale or capitative consumption ) should bed capitalized and expenditure incurred after this cut off date should be treated as revenue expenditure.  

Cost of assets includes :

Freight and in-transit Insurance

Import duties and other non refundable taxes

Cartage and carriage expenses  

Site preparation costs

Installation cost, such as special foundation or plant

Professional fees for architects and engineers

Expenditure incurred on test runs and experimental production

Borrowing cost incurred upto the date at which substantially all the activities necessary to prepare the qualifying asset for its intended use are complete.

Therefore, carriage on purchase of fixed asset is added to cost of asset.

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Answer 2

Answer:

it is the stage at which machinery is unpacked,reassembled,realinged,connected,to essential services...........

Explanation:

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