ias 16 PPE

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nickthompson
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ias 16 PPE

Post by nickthompson »

I am trying to get a better understanding of what is acceptable as "professional fees" when capitalizing against the asset. In particular when purchasing buildings as PPE, can we capitalize a valuation before purchase?
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Marek Muc
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Re: ias 16 PPE

Post by Marek Muc »

that's grey area to me, if you're doing a valuation, it means that you haven't decided yet whether to buy or not, so it's more like a research before buying than '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'

see also here:
https://ifrscommunity.com/knowledge-bas ... onstructed
nickthompson
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Re: ias 16 PPE

Post by nickthompson »

Hi Marek

i tend to agree with but if anyone has direct experience of how this expenditure was treated, I would love to hear
JRSB
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Re: ias 16 PPE

Post by JRSB »

I wonder if it helps to know the purpose of the valuation. some requirement of a purchase/lending agreement , or as project appraisal? I'd probably agree with MM that it doesn't seem to fit the definition but that doesn't mean in practice people don't put all sorts of surveys, introduction fees, project fees , etc
nickthompson
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Re: ias 16 PPE

Post by nickthompson »

yep i think you are correct JRSB and i think it will be a low expense compared to purchase of building usually so goes a bit unnoticed
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