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Why this income in not reduced from cost of construction...As asset is still in construction...if not then in which case we would have reduce income from cost of asset Also what is incidental operations (income & expenses) both .
Answers (3)
(Updated)
Letting out of asset for parking purpose is not required to bring the asset to current condition and location. Hence not reduced from cost of asset. In the same case if there is scrap of materials left and is sold - Now this scrap is generated because of construction and is incidental to the construction of fixed asset. Such income can be reduced from cost of fixed asset. Also there could be a case where trial runs are needed before making asset operational. The cost of trial run is added to cost of asset. If any income is generated due to production of trial run, the same can be reduced from cost of asset.
Thread Starter
Kalash OjhaWhat is incidental operations ?
Happening due to the PPE being acquired or constructed.