This case study is concerned with directly attributable costs.

Extravagant Inc. is installing a new plant at its production facility. It has incurred these costs:

1. Cost of the plant (cost per suppliers invoice plus taxes) BD4,500,000

2. Initial delivery and handling costs BD450,000

3. Cost of site preparation BD800,000

4. Consultants used for advice on the acquisition of the plant BD210,000

5. Interest charges paid to supplier of plant for deferred credit $300,000

6. Estimated dismantling costs to be incurred after 7 years BD310,000

7. Operating losses before commercial production $500,000

Required

Please advise Extravagant Inc. on the costs that can be capitalized in accordance with IAS 16.