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Dear Sir,
I have a question. If a company has several low value items (but will be used for more than a year), can it transfer them to inventory instead of depreciating? Cause depreciable amount of low value items will be tiny so is it worth keeping depreciating them? Does IAS 16 has any instruction for this case? Thank you for your response.
Hi,
No, the items cannot be transferred to inventory. We are using them in our business to generate profit over a period of time, longer than one year, and so they must be capitalised and depreciated.
Inventory is looking at goods for resale, and we are not selling these items.
Thanks
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