IAS 16 property plant and equipment

Question 1

What costs can be included in the initial measurement of PPE?

Answer 1

All costs directly attributable to bringing the asset into working condition for its intended use.
Eg. direct labour costs, delivery costs, legal fees and testing costs.

Question 2

In what situation can subsequent expenditure on an asset be capitalised?

Answer 2

If it enhances the economic benefits in excess of its previously assessed standard of performance.