Home › CA Inter › accounting › Property, Plant and Equipment (AS 10) › KPK Ltd is installing a new plant: supplier's in…
KPK Ltd is installing a new plant: supplier's invoice ₹45,00,000; estimated dismantling cost after 5 years ₹3,25,000; initial operating losses before commercial production ₹4,00,000; interest to supplier for deferred credit ₹2,50,000; initial delivery and handling ₹1,85,000; site preparation ₹5,00,000; consultants' fees for advice on acquisition ₹6,75,000. Ignoring (excluding) the dismantling obligation, what would be the capitalised cost of the plant under AS 10?
A₹58,60,000
B₹61,85,000
C₹62,60,000
D₹55,35,000
Answer & Solution
Correct answer: A. ₹58,60,000
1. Full capitalised cost including dismantling = ₹61,85,000.
2. Remove the dismantling estimate of ₹3,25,000.
3. 61,85,000 − 3,25,000 = ₹58,60,000.
_Source: ICAI BoS CA Intermediate Paper 1 (Advanced Accounting), Sept 2025 MCQ — Q.9, AS 10 Property, Plant & Equipment._
Related questions
Under AS 10, which cost is excluded from the capitalised cost of a plant precisely becauseKPK Ltd is installing a new plant: supplier's invoice ₹45,00,000; estimated dismantling coUnder AS 10, the cost of an item of property, plant and equipment comprises its purchase pKPK Ltd is installing a new plant: supplier's invoice ₹45,00,000; estimated dismantling coUnder AS 10, how are initial delivery and handling costs of a newly purchased plant treateUnder AS 10, are professional fees paid to consultants for advice on the acquisition of a KPK Ltd is installing a new plant: supplier's invoice ₹45,00,000; estimated dismantling coUnder AS 10, how is the estimated cost of dismantling and removing an item of PPE (an obli