Capital Requirements Checklist
For project planning, no list is all conclusive. The list below is a sound starting place for identifying the capital spending requirements for your new endeavor whether in the PRC or anywhere in the world. In addition to this list, items unique to the operation must be identified.
Another avenue is to obtain the Capital Assets scroll of a company already doing business in China and engaged in a similar project. Yet another approach, is a copy of the capital Asset scroll for a similar operation in another area of your corporation. The former may prove more valuable as it may include capital asset items unique in the country. Use all of these sources for the most thorough assessment possible. Upfront work in this area goes a long way towards meeting the capitalization goals of the project, satisfying the project stakeholders.
Because Capital Asset rules and items included in a facility may vary, ask numerous questions during the business planning and assessment phase.
Capital Asset Rules and regulations:
In order to create your Capital Asset requirements, you need to know what will be capitalized. In the PRC, any item over $250(USD) is a Capital Asset. As a result, your list will contain many items that you may otherwise have considered expense. The depreciation rules vary as well and will impact costing of the products.
Include a contingency for unexpected, unplanned, unidentified items or overages. Depending upon your experience, this may range from 10% to 25%.
Investigate public utility surcharges and fees for Utility hook-ups as you investigate your capital needs.
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