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Anonymous Controller

How do you account for using inventory to build your own asset?

Asked on May 24, 2016

We are a manufacturing company that uses our own product during the construction of our assets. In QuickBooks, how do you account for the use of our product for an asset?

Answers

Anonymous Independent Consultant • May 24, 2016

Debit: Mfg Asset
Credit: Inventory (FGI, or WIP or Raw - whatever stage your "product" is in when you convert it for a manufacturing use rather than just being held for sale or being converted to FGI.

Then start depreciating your fixed asset over its estimate useful life.

Wayne Spivak President & CFO • May 24, 2016

Another way, depending on your definition of "construction" is by using the Kitting or option feature. This way, when you sell the final item, all the individual items are relived from inventory, CGS is correct and you have the right sales price.

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