Bank charges on import of a machine to capitalize?

Question

Our company recently imported a machine from China on an Letter of Credit.  Our bank has debited some bank charges on this regard. Can we capitalize these bank charges to the asset?

Answer 1

As per IAS 16, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the
manner intended by management.  Therefore the bank charges can be capitalized as it is directly attributable to bringing the asset to your company.

Comments

LC charges relate to method of payment not to the assets so they should be expensed.