anschaffungsnaher Herstellungsaufwand
English translation: cost of production related to the coinciding acquisition
| GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW) | ||||||
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| 02:24 May 8, 2001 |
| German to English translations [PRO] Bus/Financial - Accounting | |||||||
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|  Selected response from: Andy Lemminger Canada Local time: 14:02 | ||||||
Grading comment
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| Summary of answers provided | ||||
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| na | cost of production related to the coinciding acquisition |
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| na | costs of readying for use |
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| na | Further comment |
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| na | another comment |
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Answers
27 mins
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". native German, own work as public accountant |
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Grading comment
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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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6 hrs
Further comment Explanation: "Costs of readying for use" are part of the German legal construction "incidental acquisition costs". We are talking about another thing here. To give an example: Somebody buys a piece of land with a house. Shortly after he breaks down the house to build a new one. The cost of breaking down the old house often is regarded as "anschaffungsnaher Herstellungsaufwand". I.e. it is part of the acquisition cost of the land and you can never (!) expense it because land is not depreciable... native German, own work as public accountant |
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1 day 1 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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