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German to English translations [PRO]
Bus/Financial - Accounting | | German term or phrase: anschaffungsnaher Herstellungsaufwand | discussion of tax effects of repairs to property carried out immediately after aquisition of property
Solche Aufwendungen werden als sogenannter *anschaffungsnaher Herstellungsaufwand behandelt"
Hamblock/Wessels gives 'construction expenses' for Herstellungsaufwand in this context, but what about *anschaffungsnahe* - 'associated with acquisition'? |
| | | cost of production related to the coinciding acquisition | Explanation:
The German authorities think that repairs within a certain timeframe after a purchase have to be capitalized because they are incidental acquisition costs and as a consequence they cannot be recorded as expenses. Therefore "anschaffungsnah" means "related to the coinciding acquisition". You have to stress the time aspect and the close relation (although they are still two different things). Herstellungsaufwand commonly is translated as "manufacturing cost" or better "cost of production". |
| Selected response from:
  Andy Lemminger
Canada
Local time: 16:18
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1 hr costs of readying for use
Explanation:
The GAAP Guide has a section referred to as "expensing or capitalizing costs of readying for use" In this section, specifically on capitalization of interest, the acquisition period is defined as the "period commencing with the first expenditure for a qualifying asset and ending when the asset is substantially complete and ready for its intended use."
HTH!
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1 day1 hr another comment
Explanation:
I don't think we're talking about different things here at all. Here is another reference:
"The acquisition cost of all long-lived assets is their cash-equivalent purchase price, including incidental costs. The acquisition cost of land includes charges to the purchaser for the cost of land surveys, legal fees, title fees, realtors' commissions, transfer taxes, and even the demolition costs of old structures that might be torn down to get the land ready for its intended use.
Unlike land, buildings and equipment wear out or become obsolete. In other words, the services provided by buildings and equipment are consumed. Depreciation recognizes the consumption of these services. The cost of buildings, plant and equipment should include all costs of acquisition and preparation for use. (Note ordinary repair costs are expensed if incurred after the equipment is placed in use)."
Readying for use (or preparation for use) therefore applies to both plant and equipment, as well as to real property.
The above is from Financial Accounting, Horngren, Sundem & Elliott.
Incidental acquisition costs to me represents a category under which these costs of preparation as well as other incidental costs such as those listed above would be recorded.
If we are talking about readying land for use, however, I don't really see where the term production cost comes in!
HTH - Beth
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| Changes made by editors |
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| Nov 20, 2008 - Changes made by Steffen Walter: | | Edited KOG entry | Andy Lemminger's old entry - "anshaffungsnaher Herstellungsaufwand" => "cost of production related to the coinciding acquisition" | | Nov 20, 2008 - Changes made by Steffen Walter: | | Term asked | anshaffungsnaher Herstellungsaufwand => anschaffungsnaher Herstellungsaufwand | | Field (specific) | (none) => Accounting |
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