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Fixed asset transfer to IC entity

FRS102 capitalise installation as new costs for that entity?

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Under accounting standards I understand that the costs of relocating/reorganising plant and equipment is an expense.

However, if the asset was sold to another group company (so separate legal entity) would the transport costs and installation costs be deemed as initial recognition costs by the new entity and capitalised - so long as the cost was not above realisable value?  The asset would be transferred at NBV so no gain/loss on disposal in the original entity.

Or would the fact that it is a related entity mean that these costs would be an expense?

Under FRS102

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By paul.benny
29th Apr 2022 07:59

How material are the costs and what's involved in the relocation?

In the acquiring company, you're effectively buying and installing a new asset, so it's reasonable to include the costs of transport etc. I suppose at group level there's an argument for moving those costs to P&L but it's unlikely to be material.

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