My builder client has started a new scaffolding business. He puts up scaffolding for other builders at their sites. My client has bought a substantial amount of scaffolding. What I need to know is whether the scaffolding is classed as a fixed asset or a cost of sale purchase in the accounts?
If the scaffolding is used on different jobs, and will be kept for more than one year, I would treat it as a fixed asset. Any repairs to the scaffolding e.g. new brackets should be expensed to the P&L.
If the scaffolding is just used on one job and then scrapped, it would be classed as a cost of sale.
