During a company’s start-up or expansion a wide variety of costs and expenses are incurred that are directly
associated with beginning the specific operation. For instance, ABC Company has expanded into another country and has constructed new facilities there. As part of the expansion to this facility, ABC incurs a number of major costs including labor and travel costs for the training staff, recruiting a local workforce, local government registration fees, employee relocation expenses, and the like. What is the rationale for how ABC should account for these kind of expenses as it prepares to open this new facility and do you think this is fair or should there be other options?
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