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Fixed assets - enhancements

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we have classified moulds to produce certain product as a fixed asset. we are now looking to modify existing mould which will mean that we will use it to produce a different product. i am unclear on how to deal with such enhancement.

1. do we update existing asset, ie add additional cost of modification, and keep existing serial number or

2. do we dispose of existing asset and in fact create a new one, however i am unsure on how to value the new asset - is it NBV of old asset plus modification cost? and give it a new serial number? or

3. do we keep existing asset and create an additional asset for modification cost only so have 2 entries for 1 asset? the only issue is that there will be 2 S/N's in respect of 1 physical asset.

 

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RLI
By lionofludesch
24th Sep 2020 23:00

Is this for your own internal accounting? If so, there are no rules, just do what suits your business best.

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