Minor spare parts will normally be included in inventory, while major spare parts will be considered property, plant and equipment.

Question

Quizplus · Accepted Answer

Minor spare parts are usually considered inventory because they are typically held for use in the production process or for sale, whereas major spare parts, which can provide economic benefits to a business for more than one period, are classified as property, plant, and equipment (PPE) under many accounting standards, including IFRS (International Financial Reporting Standards) and GAAP (Generally Accepted Accounting Principles).

Minor Spare Parts Will Normally Be Included in Inventory, While