Administration and other general overheads

 Administration and other general overhead costs are not costs of an item of PP& E. This means that employee costs not
related to a specific asset, such as site selection activities and general management time do not qualify for capitalization.
Entities are also not allowed to recognize so-called ‘start up costs’ as part of the item of PP& E. These include costs
related to opening a new facility, expenditure incurred by an entity to carry out a feasibility study or survey to decide
whether to acquire, construct or invest in an asset, introducing a new product or service (including costs of advertising and
promotional activities), conducting business in a new territory or with a new class of customer (including costs of staff
training) and similar items. [IAS 16.19]. These costs should be accounted for (in general, expensed as incurred) in the
same way as similar costs incurred as part of the entity’s ongoing activities.