[GNC] Another "multi-account" logical issue - any advice on how to register this?

[Chris Miller]

Hi Stan,

> I would absolutely record shipping as an expense, not an asset. The
> asset has value after you receive it; the shipping is "used up" the
> moment the package arrives. Only things that still have value should be
> listed in Assets.

I respectfully disagree:

The Financial Accounting Standards Board (FASB) guidance that addresses the book value of an asset, including costs related to acquisition and deployment (such as shipping and installation), is covered in ASC 360, Property, Plant, and Equipment.

Under ASC 360, costs that should be included in the book value of an asset are those necessary to acquire the asset and prepare it for its intended use. This includes:

    Purchase price
    Direct costs of acquisition (e.g., shipping, handling, and installation)
    Costs required to bring the asset to the location and condition necessary for it to be used in operations

These guidelines reflect that the book value (or carrying amount) of an asset is not just the purchase price but also any ancillary costs required to make the asset operational.
-- 
Chris.