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Do you include warranty charges on the initial cost of a fixed asset?
Wiki User
∙ 12y ago
Include the cost of extended maintenance/warranty contracts in the asset valuation if the contract is purchased at the same time (or soon thereafter) as the capital asset. Depreciate these contracts over the useful life of the asset not the the contract life. Do not capitalize payments for contracts not purchased at the same time as the capital asset.
Wiki User
∙ 12y ago
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Is warranty expense a current or non-current asset?
An expense is not an asset at all.
Examples of capital expenditure and revenue expenditure?
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How do you calculate initial investment in an asset?
Cost of new asset+cost of installation - after tax proceeds from sale of old asset +/- change in net working capital
Which Ce flight is considered the initial hub for coordinating with majcoms?
Asset Management
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Initial AUC stands for Asset Under Construction in Real Estate...
Should the cost of an extended warranty purchased be capitalized with the original cost of the asset?
According to International Financial Reporting Standards (IFRS):"The cost of an item of property, plant and equipment comprises:(a) its purchase price... after deducting trade discounts and rebates(b) any costs directly attributable to bringing the asst to the location and condition necessary for it to be capable of operating in the manner intended by management." IAS 16 par 16(b)The basic principle for capitalization of costs on initial recognition, is that only directly attributable costs can be capitalized. This means costs eligible for capitalization are its purchase price and costs to bring the asset to the location and condition necessary to function as management intended.An extended warranty should therefore not be capitalized along with the cost of the asset, as the physical asset would still be in the location and condition necessary to function as management intended regardless of whether or not the extended warranty was purchased.
What is a non-productive asset?
it is a type of asset which does not produce any output.. for example TV is non-productive asset if you use it for home viewing only but it may become productive asset if you start using it to make money, like for example in african villages where the owner charges fees for viewing the movies..
What is a non productive asset?
it is a type of asset which does not produce any output.. for example TV is non-productive asset if you use it for home viewing only but it may become productive asset if you start using it to make money, like for example in african villages where the owner charges fees for viewing the movies..
Is it correct to include depreciation of disposed of asset in income statement?
Depreciation of any asset is charged to income statement till the actual date of disposal of asset and after that date depreciation is not charged to income statement.
Is prepaid expense a debit or credit?
It is an asset, therefore a debit (on initial recognition). It is credited as the prepaid expenses are actually received (expensed out)
What companies sell asset tracking software?
The main companies that sell asset tracking software include Wasp and Wisetrack. Both are evry popular.
