I have purchased an engine worth 8000 lei for a Mercedes truck . This value fits into the limits stipulated by the law regarding fixed assets. How is this piece registered into accounting? Does it add to the truck's value yet to be recovered and it is recovered together with it, in the period left to be amortizata? If so, what are the formalities that need to be done regarding the enhancement of the initial value of the fixed means? Or is there another accounting approach to it? Can it be registered as a spare part?

According to the law, the investments made in fixed assets as later expenses have to have, as an effect, the improvement of it's initial technical parameters and it has to lead to future economical benefits.

The benefits can be obtained either directly, by enlarging the profits, or indirectly, by reducing the maintenance and functioning expenses. For these investments, the reception record has to be created and the fixed mean will be filled in the "operations that regard movement, enhancement and decrease of the value of the fixed mean" column. The amortizare of these investments is done, either in the normal use period left, or by prolonging the normal use period with up to 10%, or 20% in the case of public institutions. If the later expenses are made after the end of the normal period, a new normal period will be established by a technical commission or by an independent technical expert.

The expenses on fixed means that aim at re-establishment of the initial state are regarded as repair expenses.
In conclusion, if the purchased engine is ment to replace the existing one and does not aim at improving the initial parameters of the truck, this will be registered into accounting as an expense.