Question

Mr. Cobbina recently acquired an Hyundai Grace H100 through an auction which was conducted on the “As Is Where Is” basis. He subsequently spent the following in bringing the car onto the road:
Refitting of the engine 4,100
Set of tyres     720
Insurance     470
Road worthy Certificate         150
Income Tax       60
DVLA Yellow tape     100
Calculate the cost of the Hyundai Grace H100 in accordance with the measurement of costs of assets.

Answer 1

cost of the Hyundai Grace H100 = 4100+72+470+150+100= 5540

Fixed assets, according to International Accounting Standard (IAS) 16, are long range assets whose cost can be measured reliably. The equipment's cost is calculated by adding the item's purchase price, or historical cost, to the other costs related to acquiring the asset.

Refitting of the engine , Set of tyres, Insurance    Road worthy Certificate ,DVLA Yellow tape are all directly related to car but Income Tax is not directly related expense on car .