Student Question: Why would a cheque for solicitor fees and stampduty on the purchase of land and bu

Discussion in 'Accounting' started by GO, Sep 23, 2006.

  1. GO

    GO Guest

    Why would a cheque for solicitor fees and stamp duty on the purchase of
    land and buildings not be treated as an expense?

    It has been written into the land and building accounts, rather than an
    expense, and I am being asked why???

    Would have been nice if the text book covered it....

    Any help please?

    GO.
     
    GO, Sep 23, 2006
    #1
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  2. Because these payments are part of the costs of acquiring the capital
    asset, not a separate operating expense.
     
    New Cassandra, Sep 23, 2006
    #2
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  3. GO

    GO Guest

    So any cost going towards acquiring a capital asset is not an expense.
    So broker fees for financial advise for a business would not be an
    expense if the broker was advising on an investment?
     
    GO, Sep 23, 2006
    #3
  4. Spot on. This can get complicated though, as initial advice and ongoing
    advice is treated differently for both accounting and tax purposes her
    in Australia
     
    New Cassandra, Sep 23, 2006
    #4
  5. GO

    GO Guest

    Thanks for your help.

     
    GO, Sep 24, 2006
    #5
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