Asset evaluation : tooling

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Nitin Deole (Querist)
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08 October 2016 Suppose a firm invests in development of a particular tooling at vendor and starts using it for a defined volume of business. Subsequently after a couple of years, if with certain additional investment in same tooling, some modification is done so as to reap more volume benefits. How such tooling assets will be valued? How it will get accounted? What will be value of the asset if intended to be sold?

CA Amrita Chattopadhyay

CA Amrita Chattopadhyay (Expert)
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14 October 2016 Since the company has invested certain amount in the tooling, such expenses will be considered as capital expenditure and included in the value of the assets. When the asset is to be sold the value of the asset would be the cost at which it is recorded in the books.

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