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Should the cost of an extended warranty purchased be capitalized with the original cost of the asset?
IMHO999
According to International Financial Reporting Standards (IFRS):
"The cost of an item of property, plant and equipment comprises:
(a) its purchase price... after deducting trade discounts and rebates
(b) any costs directly attributable to bringing the asst to the location and condition necessary for it to be capable of operating in the manner intended by management." IAS 16 par 16(b)
The basic principle for capitalization of costs on initial recognition, is that only directly attributable costs can be capitalized. This means costs eligible for capitalization are its purchase price and costs to bring the asset to the location and condition necessary to function as management intended.
An extended warranty should therefore not be capitalized along with the cost of the asset, as the physical asset would still be in the location and condition necessary to function as management intended regardless of whether or not the extended warranty was purchased.
Wiki User
∙ 12y ago
Wiki User
∙ 11y agoNo. It's not necessary.
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Viking range extended warranty?
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You can find information about extended car warranty insurance at your local dealership where you purchased the vehicle. You can also find out that information from your insurance company.
Are extended warranties available for student laptop packages?
Almost any laptop purchased, including those purchased specifically for student usage, come with the option to purchase an additional extended warranty. Oftentimes the company selling the laptop, such as Apple, HP, or Dell, will offer one extended warranty, while the third-party company, if one was use, to sell the laptop will offer an addition extended warranty.
