Crates & Pallets

[born_here]

Gents,

Could you please help me out, I have received one query, from one of our division and they want to capitalize the crates and pallets. I am bit confuse on this one due to the fact that individual crate have nominal value but if consolidated it will become material amount.

Is it possible to capitalize the crates and if it is possible then could you please guide me treatment also.

Thanks in advance

 

[Fidget]

You could, but your issues will be how to value them, how long do they last before needing replaced to depreciate them and how do you keep track of them to assess the overall value of them year on year.

 

[kirby]

You can go through a lot of trouble and work to do this only to have your auditors come in at year end and say "no way" to this. Suggest you run this by them first before you do all this.

 

[Counterofbeans]

Gents,

Could you please help me out, I have received one query, from one of our division and they want to capitalize the crates and pallets. I am bit confuse on this one due to the fact that individual crate have nominal value but if consolidated it will become material amount.

Because of this, I would

Is it possible to capitalize the crates and if it is possible then could you please guide me treatment also.

Sure you can.

Are these part of any final product that is sold?

What do you estimate the useful life of a crate to be?

If less than 1 year, I wouldn't set it up as a fixed asset and depreciate.