There are a number of ways in which companies attempt to deal with the problems of depreciating minor assets and loose tools. Could you provide some guidance here please? There are some companies that capitalize their minor items at a fixed amount, for example, when they are originally provided, as a form of capital 'base stock'; additions are not capitalized and depreciation is not charged, is this allowed under IFRS standards?
Could you highlight the different ways for accounting for minor assets and loose tools? Could also you provide some working examples for clarity on the matter? Inclusive Journal entries. Thank you kindly.