Refurbished product Capitalization as Fixed Asset

Summary:
 Lease-refurbish-redeploy model asset capitalization and Inventory valuation.

Content (please ensure you mask any confidential information):

Business Context

We
manufacture electronic tablets that follow this lifecycle:

1. Manufacture
   → Standard cost $150 (Material $100 + Labor $50 + Overhead $30)
2. Deploy to Customer →
   Capitalize as Fixed Asset, depreciate over 36 months
3. Return from Lease → Receive
   back damaged/worn units
4. Refurbish → Repair and
   redeploy to new customers
5. Create New Asset → After
   refurbishment, create a new Fixed Asset to start depreciation on
   refurbishment cost
6. Repeat → Same serial can be
   leased multiple times until EOL

 

Critical Requirements:

• Serial number genealogy
  tracking across entire lifecycle of an SKU (No separate SKU for new and