Can You Capitalize Service Agreements

The company provides airport terminal services. if it decides to extend its activities to the storage of bulk goods and the company wishes to obtain a specific loan for the construction of the warehouse. Lager is a new asset, so it`s PSA, isn`t it? And why the company wants to build its own assets instead of acquiring them through a direct purchase or the acquisition of credits to get the warehouse. In most cases, you can estimate the useful life of the upgrade quite reliably, so it should be capitalized on as PPE. The duration of use depends in principle on the duration of your rental agreement, so you must take this into account. 1. In this case, can we capitalize the assets? 2. In this situation, we may have capitalized on operating costs (e.g. B salary of the project department).

Hello Silvia, we paid an authorization to the government to build a building. Can we capitalize on the cost of authorization? Even for the same building, we had to incur costs to remove an old structure from the countryside to evacuate the space. Can these costs be activated? Thank you for your reply. Inexhaustible collections, works of art and historical treasures, where economic benefits or performance potential are so slowly exploited that the estimated lifespan is exceptionally long, are not amortized. Because of their cultural, aesthetic or historical value, these assets are protected and preserved in a manner superior to that of similar assets without such cultural, aesthetic or historical value. Majolographic collections or individual objects that can be sold out, such as.B. Exposures whose useful life is reduced by exposure, education or research applications should be amortized over their estimated lifespan. No loss of value is recorded for collections or individual objects that are inexhaustible. All works of art and historical treasures acquired or donated are capitalized. I audit a textile factory. During the audit, I learned that stores and spare parts are kept in stores for more than a year and management believes that stores and spare parts can be used even after three or four years. My question is that if these operations are not used every year, should the company capitalize it or should it remain as a company and spare parts? Hello, I have a foreign currency loan for the acquisition of fixed assets.

Due to exchange rate fluctuations, I have a currency loss. Please confirm whether the currency loss could be capitalized or not. The amount activated must be an allocation of the net interest costs incurred during the period necessary for the completion of the asset. The interest rate for capitalization purposes is based on the interest rates on outstanding university loans. If a particular new loan can be identified with the asset, the interest rate on that loan should be used as the basis for allocating interest charges for the asset. . . .