SCHEDULES
SCHEDULE 8FORM AND CONTENT OF ACCOUNTS PREPARED BY SMALL COMPANIES
PART IIACCOUNTING PRINCIPLES AND RULES
SECTION BHISTORICAL COST ACCOUNTING RULES
Miscellaneous and supplementary provisions
Determination of purchase price or production cost26
1
The purchase price of an asset shall be determined by adding to the actual price paid any expenses incidental to its acquisition.
2
The production costs of an asset shall be determined by adding to the purchase price of the raw materials and consumables used the amount of the costs incurred by the company which are directly attributable to the production of that asset.
3
In addition, there may be included in the production cost of an asset—
a
a reasonable proportion of the costs incurred by the company which are only indirectly attributable to the production of that asset, but only to the extent that they relate to the period of production; and
b
interest on capital borrowed to finance the production of that asset, to the extent that it accrues in respect of the period of production;
provided, however, in a case within head (b), that the inclusion of the interest in determining the cost of that asset and the amount of the interest so included is disclosed in a note to the accounts.
4
In the case of current assets distribution costs may not be included in production costs.