A business engaged in intercontinental transport of heavy goods makes the following payments during its financial year ended 30.9.20X0:

Payments relating to the property:

(i) £585,500 to acquire the freehold of a garage site.

(ii) £25,000 as compensation to the previous owner of the garage for his personal relocation expenses.

(iii) £2,500 as stamp duty, £300 as land registry fees, and £2,500 as solicitor’s conveyancing fees for transfer of the title to the garage.

(iv) £14,500 for constructing a security fence around the property’s perimeter.

(v) £145,500 for structural changes to the building, £17,800 for fitting shatterproof window glass, £400 for fixing electric bulbs of higher wattage and £12,600 for redecorating.

(vi) £37,400 in legal fees defending a decision to restrict the right of way of neighbours across the property.

(vii) £126,200 for constructing a compound for parking containers.

(viii) £35,500 for entertaining business contacts on moving into the property.

Payments relating to machinery:

(i) £214,500 on ordering machinery, from Japan, for servicing trucks.

(ii) £12,400 for freight and insurance and £46,500 for duty when the machinery arrived from Japan.

(iii) £12,600 for reinforcing the garage floor and £8,800 for constructing a base for the machine.

(iv) £1,200 for lubricating the machine and £1,100 for test runs.

(v) £21,400 for relocating the machine following a complaint by senior management of noise pollution.

Required:

(a) State the criteria you would use to identify the payments to be treated as part of the cost of assets.

(b) Determine, with explanation, the value at which you would report the assets.