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Hi sir,
1) is it always the case that if costs of maintance required before the expected normal period.. we should expense them?
2) i didnt understand how to deal with the funnels
Thanks
Hi,
We never capitalise maintenance costs as the do not help generate economic benefit.
The funnels should have been identified as a separate component part and they haven’t been, so we need to start depreciating them as a separate component. The issue is that we then need to work out what value they would have been if we had been depreciating them separately and write the cost down to this value so that depreciation can then begin.
Thanks
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