Accounting treatment for construction period :
An entity would incur expenditure during the construction period, both for acquiring the new assets as well as on administration.
Direct expenses: Cost of tendering for plant and machinery, travel related to inspection and sourcing of equipment, etc., are incidental to acquiring the assets.
Adm expenses: Office rent, communication costs, staff costs, etc., which cannot be directly related to acquiring the fixed assets.
How should the above be treated in the books ?
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