View Full Version : Posting computer components
03-08-2005, 09:56 AM
We are building a white box computer that will be used as a loaner for our clients. In the past, the computers were complete at the time of acquisition, and were posted as assets.
How should I post all the parts going into the buildout (things like video cards, software, CD/DVD-RW, coming from different sellers)? Should they be considered individually as assets that will eventually depreciate, or expensed as supplies, and then manually transferred by JE as the final computer equipment piece at the total cost of the buildout?
Thanks for all the great advice out there!
03-08-2005, 12:53 PM
If you were selling it, then it is an asset made up of components. You would normally use the build function and create a new item from the parts, or you could use the group item and simply add one of each component, plus a service item for the work done and have it show as being a box of components.
But you are not selling it. And there lies the problem. You need to take the parts out of stock, but the final item becomes a "Loaner" and a totally different type of asset - one that will be depreciating.
I would suggest that you use the build function and create a new item - but with a different asset account. Set up a "Loan Computer" Asset account and link built the item to that. When the item is built, it will remove the individual components from stock and they become part of the loaner item. By posting it to a different asset account you can then depreciate them as you need to, without affecting the stock on hand asset account.
You can depreciate the item with a journal entry to a depreciation expense account at any time (assuming this is ok with your accountant). I would tend to maintain a value on the items that reflects what they can actually be sold for. So it almost means that a depreciation should be taken as soon as it is used. I don't see anything wrong with that, but best to check it out.
03-08-2005, 01:33 PM
Thanks, John, for the speedy reply. Actually, we aren't taking anything out of inventory for this build; we are ordering internal parts specifically for the build. This is something we normally don't do; our clients' equipment is special-ordered from the manufacturer in Germany, so we don't keep inventory on hand. The equipment is big-ticket biotech lab equipment, and normally, the whole system comes as a single-priced unit (COG and sale).
We just happened to have a replacement shuttle PC housing shipped to us by the Shuttle company because the original was defective and had a no-refund policy (but they would replace the original). We purchased a second Shuttle housing because the client was waiting for the build, so we ended up some weeks later with the replacement for the original being shipped to us. We only build out PCs for our clients on rare occasions, so we decided we could use this replacement for part of our loan equipment available when clients are having their EQ repaired. So it has gone from client order, non-inventory, to company EQ.
I will try your suggestion. It makes sense to me. Thanks so much for the help!
vBulletin® v3.8.4, Copyright ©2000-2013, Jelsoft Enterprises Ltd.