Hello,
We are constructing a machine that will help us to improve our production process.
At this stage we do not know if this machine will be good enough and therefore will be used in the future. If not, it will be scrapped.
Can we capitalize all the hours and materials purchased to construct the machine even if we do not know if it will be used in future? To my understanding is no.
Am I right?
Thanks
Regards
Feasibility study: Capex or Opex
Re: Feasibility study: Capex or Opex
Not until it becomes 'probable that future economic benefits associated with the item will flow to the entity'
https://ifrscommunity.com/knowledge-bas ... quirements
https://ifrscommunity.com/knowledge-bas ... quirements
Re: Feasibility study: Capex or Opex
Is it necessary to delay the recognition of expenses incurred by the company, which were made for a machine without certainty of future benefits or current ones, until certainty about the machine's utility is established?
Re: Feasibility study: Capex or Opex
What do you mean by 'delaying' the recognition of expenses?
Re: Feasibility study: Capex or Opex
I was looking at consideration for the matching principle
Re: Feasibility study: Capex or Opex
Sorry, but I still don't know what you mean by 'delaying' the recognition of expenses
Re: Feasibility study: Capex or Opex
My assumption was answered by the link you had shared earlier