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Cylinder given to packaging company for making pakages

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(Querist)
29 March 2018 suppose a company " X" give cylinders ( that are used in making packaging material) to another company "Y" which is under contract of making their product packages.. so the cost of purchasing that cylinder is our expense or an asset.?
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CA Himanshu Bansal

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CA Himanshu Bansal (Expert)
12 April 2018 Ideally if these "cylinders" are part of final product, it should be recorded as purchase(expense).

If those cylinder are being used for prepraring your final product and life of cylinder is more than an accouting years, management may consider to treat it as asset. It would depend on its useful life.
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