Discuss how the cost of the new equipment

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Reference no: EM13866186

Vedat Corporation acquires new equipment with a list price of $100 to expand its product line. Vedat pays $50 of this cost on delivery and agrees to pay $25 of the remainder in one year's time and the final $25 in two year's time. The company extends a portion of its factory wall in order to fit the new machine in place and then rearranges existing equipment into a more efficient layout. The new equipment is dropped during installation, requiring repairs before it can be used. At the end of the equipment's useful life, Vedat Corporation is required to dismantle and dispose of it, paying a special environment levy due to hazardous materials in its construction. Vedat is licensed to manufacture products with this equipment, and is required to pay a royalty for each unit produced.

Discuss how the cost of the new equipment should be determined. (Considering IFRS standards, PP&E IAS no. 16)

Reference no: EM13866186

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