The acquisition cost of a fixed asset (SYSCOHADA, Art.37) is obtained by including in the cost of the fixed asset :
- Incidental expenses directly related to the purchase transaction ;
- installation costs required to bring the asset into a usable condition;
- acquisition costs, in particular registration duties, fees, commissions and deed expenses
- Initial cost estimate for dismantling, removing the asset and restoring the site;
- Borrowing costs incurred to finance the acquisition or production of the asset.
What about the cost of the training required to put the asset into use, for example, training engineers to operate and maintain equipment?.
ANC's response in France
Autorité des Normes Comptables regulation 2019-09 (approved by order dated 22-04-2020) gives the option of recording these expenses as fixed assets.
This new ANC regulation is part of a series of requests from companies to the French government to be able to record these costs as fixed assets, so as to be able to value human capital on their balance sheets.
However, the ANC limits the possibility of activating these training costs to :
- Billed by external service providers ;
- Required to bring acquired tangible and intangible fixed assets into service.
What does SYSCOHADA provide?
SYSCOHADA does not explicitly provide for the inclusion of training costs in the cost of fixed assets. Installation costs could be assimilated to training costs; however, no details are given in the application guide. Installation costs include preparation, assembly and commissioning.
Our experience with fixed asset audits shows that most companies include training costs because they are necessary when investments are commissioned.
The equipment concerned is generally complex, and cannot be used by users without training.
Examples include the cost of installing a scanner, high-tech equipment, specific software...
What is included in training costs?
In general, this refers to training provided by the supplier to the company's users.
Training costs may include the supplier's fees (generally included in the capital expenditure estimate), travel and accommodation expenses for the consultants responsible for carrying out the training activities or for the participants...
The advantage of capitalizing training costs is that they are spread over the life of the asset, so that the company does not have to bear these often substantial costs over a single year.
Our opinion
In our opinion, given the current practice of certain companies regarding the capitalization of training costs, the accounting standard-setter should amend article 37 relating to the entry cost of a fixed asset by including training costs.
However, the evolution of OHADA regulations in this direction must :
- Limit these costs to those incurred in training users of the asset (technical staff or administrators);
- Consider as necessary costs for the commissioning of a fixed asset, only the indispensable costs incurred for training in the use of the asset;
- Give the option of including these costs in the cost of the asset;
- Note that these costs are not in themselves a component of the main asset.
