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Charges related to machinery purchase

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Querist : Anonymous

Querist : Anonymous (Querist)

13 February 2018 My firm bought a machinery from out of India. At the time of clearance we get bill from agency charges including Ocean, Endorsement, Inland, Container Clearing and many other Charges.

Now tell me that all of them charges are Indirect Charges or Capital charges which is Add in Value of Machinery

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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13 February 2018 All are capital charges which is added to value of machinery.

Expert : Anonymous

Expert : Anonymous (Expert)

13 February 2018 All are accountable to Capital of Machinery...

Roney

Roney (Expert)
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15 February 2018 I agree with Mr. Seetharaman.
Property plant and equipment should be recognized at cost. Cost includes purchase price, duties, taxes, handling and delivery charges, installation charges etc. (IAS 16 Para 16 & 17)

All these cost should be added to the cost of the asset rather than treating them as expenses.

You could use IAS 16 (para 16 & 17) as reference.

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