In cost accounting demolition costs are the costs the retirement of assets. Traditionally, they are treated as in external accounting. Under commercial law, demolition costs are considered expenses in the period in which they are incurred, and are a.) charged to the result from ordinary activities or b.) charged to the extraordinary result (Income statement "P&L"). In line with the requirement for capitalisation for tax purposes, it is considered permissible to classify demolition costs as subsequent costs. acquisition cost must be capitalised when buildings are acquired with the intention of demolition, provided that no new buildings are erected. According to commercial law, a provision must be made for demolition costs if, for example, there is a contractual obligation to demolish buildings on third-party land.
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