Fixed Asset adjustment with parts

[Former Member]

Dear All

I would like to know which function to adjust the fixed asset value as following case.

I issue AP invoice to buy a truck (fixed asset item), then the capitalization document will be created automatically.

After few year, one of the tire is broken, and I buy a new tire for the truck. And replace the old one. The truck value become increase.

Should I use the AP invoice to  buy a tire as fixed asset?

Should I retire this new tire and then use asset revaluation to adjust the truck?

What is the best method to handle this case?

Regards

Edmund

[Former Member]

Generally, buying tyre is an expense item.

It shall not be capitalised.

Use AP Invoice services, for repairs and maintenance instead of capitalizing.

[Former Member]

That's mean, I use AP invoice services.

and then use asset revaluation for the truck?

[Former Member]

Ask your finance department personnel or manager, whether you need to revalue the asset or rather need to charge it to Profit and Loss account as expenditure.