Which of the following items should not be capitalized relating to fixed assets?
AAdministration and general expenses
BStand by equipment and servicing equipment
CExpenditure incurred on test runs and experimental production
DInterest payable on loans or deferred credits taken for the acquisition or construction of fixed assets before they are ready for use
Correct answer
A. Administration and general expenses
Explanation
Only those expenses which relate to and specifically attributable to the asset are capitalized. Administration and general expenses cannot be specifically attributable to the asset and hence cannot be capitalized.