Capitalising labour

Capitalising labour

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We have used our own labour to install an asset. When the cost of this labour is capitalised should we be using our internal cost rate which is labour and overhead or just the labour element?
thanks

Danny

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By simong0516
05th Mar 2008 09:10

See FRS15
Under FRS15 only directly attributable costs can be capitalised, therefore if your internal cost rate is used to absorb general admin / overheads you will need to strip this element out.

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