Any Fixed Asset accountants out there?

[marcusandingrid]

Hi there

At my workplace, we had a sizeable invoice in recently, relating to the dismantling/transportation/re-installation of a workshop from a supplier's site to our own site. The workshop was bought by ourselves some time ago and placed at the supplier's site so that they could do the various pieces of work in it. It has since been fully depreciated.

The amount of work going to the supplier has recently increased to the point where it is now more cost-effective for us to do the work ourselves, hence the dismantling of the workshop and it's transportation and re-installation at our site.

We have coded the invoice to an expense cost as it is effectively a fixed asset maintenance cost - restoring the asset to it's original/previous condition (albeit at a different location). Would anyone disagree with this treatment - is there any argument for capitalising the cost?

Thanks

[Frankymo1e]

I don't see how the asset's absolute value could have been increased merely by it being moved from one place to another. I would certainly expense the removal and reinstallation costs. Has it been modified in any way?

However, you say it is fully depreciated. If it is of use still, it should be revalued. Presumably its lifespan is now extended!

[lincs]

If you didn't own the asset beforehand, then you would capitalise the costs. Costs of bringing the asset to its needed working condition and location are capitalised. However transporting the asset around after that would be an expense, otherwise it could turn into a books-cooker.

In my humble opinion.

[Frankymo1e]

I assumed that despite its location the FS was owned by the current company in question, since no mention of a purchase or consideration was mentioned!

"The workshop was bought by ourselves some time ago and placed at the supplier's site " was also a bit of a giveaway ;)

Otherwise, simply treat it as any other FA purchase.