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Hi,
My business makes products on machines that use significant amounts off tools to make these parts. Some of these tools wear out fairly quickly and some can be expected to last well over 5 years, although they could break on day 1. Currently we expense all the tooling immediately regardless of its expected useful life. Anyone have any other experience with this similar scenario and whether or not you capitalize some of your longer life tooling. For example some of these tools that last over a year may only cost $150 each but we may buy 20 at a time so the dollar value becomes much higher.
My business makes products on machines that use significant amounts off tools to make these parts. Some of these tools wear out fairly quickly and some can be expected to last well over 5 years, although they could break on day 1. Currently we expense all the tooling immediately regardless of its expected useful life. Anyone have any other experience with this similar scenario and whether or not you capitalize some of your longer life tooling. For example some of these tools that last over a year may only cost $150 each but we may buy 20 at a time so the dollar value becomes much higher.