We have some computer workstations that were pretty expensive when we bought them in 2009, but now sit idle b/c we laid off some engineers this past year. Should I write those off in 2010?
Year-end capital asset clean up question
Answers
I find the answer to most
1) I assume they still have value -- just because you don't have the people there to use them does not make them un-useable or have a decreased value. so I would first attempt to apply a lower of cost or market process to write them down to market value (as appropriate).
2)there may be
1
If you are never going to use them I would try to sell them which means you should mark them down to what you think you can get for them.
If you think they will be redeployed internally I would do nothing.
Hi Jane. You say the workstations were pretty expensive when purchased in 2009, but the question is how material the NBV is now to your total assets. If the amount is material, under US GAAP the idling represents a significant adverse change in the manner that the asset is being used, so you would have to perform a recoverability evaluation under ASC 360. This might require you to write them down as suggested above.
Also, if material, the idled assets should be separated on the balance sheet, with appropriate disclosure made in the footnotes.
Hope this helps.
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Accounting