New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    According to AS 26, which of the following costs cannot

    be capitalized as part of an intangible asset?
    A Purchase price of the intangible asset, including import duties and non-refundable taxes Correct Answer Incorrect Answer
    B Directly attributable costs of preparing the asset for its intended use Correct Answer Incorrect Answer
    C Costs of advertising and promotional activities related to the intangible asset Correct Answer Incorrect Answer
    D Professional fees paid for legal services directly related to acquiring the asset Correct Answer Incorrect Answer

    Solution

    AS 26 states that costs directly attributable to preparing the asset for use can be capitalized, including purchase price and professional fees. However, costs such as advertising, promotional activities, and general overheads are not capitalized and are expensed as incurred.

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