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Hi Chris… your videos are really helpful but can you please explain me that why are we taking 3 million in intangibles and 5 million in PPE ?
If 5 million form part of tangible asset then why not 3 million ? and why are we considering 5 million as tangible assets ?Hi,
This is the expenditure on the prototype (physical) asset that will be used to produce whatever it is going to do. It is therefore a physical asset and not intangible so it will be PPE.
Imagine you’ve an idea that you’ve researched, it works and so you enter the development phase where in order to produce the saleable product you need to build a machine to produce it, that’s the PPE.
Thanks
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