Capitalisation of spare parts

Hi Muhammad,

There are two options:-

1. Procure all the CSP items into inventory, and issue at the time of actual consumption. Meanwhile use a clearing account to transfer the same amount to AuC and capitalize. Use the same clearing account as consumption in obyc.

Hence GR

Inv A/c Dr

     To GR Clearing

Create AuC through:-

AuC A/c Dr

     To Asset Clearing A/c

At the time of consumption

Asset Clearing

     To Inventory

Clear Asset Clearing account once CSP materials are consumed

2. Follow normal cycle and create non valuated material for separate tracking of inventory

Thank You

Nishu