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Relocation cost of moving an existing asset to a new site is:
ACharged off as expense
BCapitalised in asset cost
CAdded to depreciation rate
DAdded to inventory total
Answer & Solution
Correct answer: A. Charged off as expense
1. AS 10 explicitly excludes relocation costs from capitalisation.
2. They are not part of bringing the asset to its initially intended location.
3. They are expensed in the period incurred.
_Source: ICAI BoS Foundation Paper 1, Ch 5 "Depreciation & Amortisation", §2 exclusions ¶2_
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