Question: MyNextProblem Ltd has acquired a new building called Next In Line Building for $2 000 000. It has incurred incidental costs of $30 000 in

MyNextProblem Ltd has acquired a new building called Next In Line Building for $2 000 000. It has incurred incidental costs of $30 000 in the acquisition process for legal fees, real estate agents fees and stamp duties. At the quarterly Board meeting, the management believes that these costs should be expensed because they have not increased the value of the building and, if the building was immediately resold, these amounts would not be recouped. In other words, the fair value of the building is considered to still be $2 000 000.

Required: Discuss how these costs should be accounted for in the books of MyNextProblem Ltd.

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