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Can I capitalize stamp duty on a land purchase?


We have purchase a land and we need to pay stamp duty to government on the purchase. Can we capitalize the stamp duty or it should be expenses?

asked Dec 21, 2016 in IAS 16 - Property, Plant and Equipment by Hasithz

2 Answers

0 votes
 
Best answer

IAS 16.16 says

"The cost of an item of property, plant and equipment comprises:
(a) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates."

Since stamp duty is a non-refundable tax, you can capitalize with the land cost.

answered Dec 21, 2016 by Peterz Level 2 Member (4,560 points)
selected Dec 22, 2016 by Peterz
+1 vote
Yes, non-refundable taxes incurred on the acquisition of items of PP&E is to be capitalized according to IAS 16, PP&E. The stamp duty is an example non- refundable tax which must be capitalized as part of the cost of the asset acquired.
answered Dec 22, 2016 by majorprof


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