Has anyone come across the scenario where individual components are used to create a new innovative piece of equipment to be used in the business? E.g. components used to build a machine/piece of equipment, that is more efficient than existing alternatives, to be used in manufacturing or in the provision of services (e.g. electrical equipment used for surveys or car repairs etc) - I.e. it will be used by the company rather than sold.
If so, where it may be impractical, or not commercially viable, to create a prototype (due to costs or time), prior to making the actual machine/piece of equipment, can the final (and only) item be considered a prototype up until it is confirmed that is is useable and scientific or technological uncertainties resolved? I,e, the costs of the parts to construct the machine/equipment are consumed in making the prototype rather than creating a tangible asset.
I am going around in circles between the above being a capital item (piece of equipment) or R&D (development of a new/substantially improved piece of equipment prior to commercial application).
I understand that the costs of developing and producing a prototype of a new product, to eventually manufacture and sell, will be R&D (up until scientific or technical uncertainty is resolved) but the guidance doesn't seem to be so clear when the item being developed will ultimately be used by the company as an asset.
The above assumes that the R&D will meet the definitions of a scientific or technological advance and that there are scientific technological uncertainties involved. The question is aimed at determining whether the costs of parts used in the construction of equipment, that will be used by the business, can be considered part of the construction of a prototype, even where the item will ultimately be the final piece used by the company.
Any thoughts or views would be much appreciated.