What type of costs cannot be capitalized according to the guidelines?

Training costs for staff on using new equipment cannot be capitalized because they do not result in the acquisition of a long-term asset or enhance the asset's future economic benefits. Capitalization applies to costs that are directly attributable to the acquisition, construction, or improvement of an asset.

In this context, legal fees associated with a building purchase, materials used in construction, and freight costs for delivery are all directly related to bringing a tangible asset into a usable condition. These costs contribute to the overall value of the asset and are part of the necessary expenditures to prepare the asset for its intended use. Conversely, training costs are considered operational and related to ongoing business activities rather than initial acquisition or enhancement of physical assets.