How should sbs classify the spare parts that it expects to use within one year - as inventory or as a prepaid/other current asset?

Question

Julianne West

Business

18 February, 08:09

How should sbs classify the spare parts that it expects to use within one year - as inventory or as a prepaid/other current asset?

+1

Answers (1)

Know the Answer?

Immanuel Gibbs · Answer 1

Sbs could do it by starting to find out each functions of the spare parts.

If the spare parts is resided to be a part of the product, it should be classified as inventory.

IF the spare parts is resided for people who want to redeem warranty, it shold be classified as prepaid.

If the spare parts is part of research and development it should be classified as other assets.