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Learning Objective $10-01$ Identify the various costs included in the initial cost of property, plant, and equipment, natural resources, and intangible assets.

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The initial cost of property, plant, and equipment and intangible assets acquired in an exchange transaction includes the purchase price and all expenditures necessary to bring the asset to its desired condition and location for use. The cost of a natural resource includes the acquisition costs for the use of land, the exploration and development costs incurred before production begins, and restoration costs incurred during or at the end of extraction. Purchased intangible assets are valued at their original cost to include the purchase price and legal and filing fees.

Costs to be Capitalized $$ Intangibles

Knowledge Check $01$

Match the term and the definition.