Catalysts should never be amortized and treated as a consumable at the same
time!
Those metals that are not recovered and are disposed of with the catalyst base are
treated as an integral part of the catalyst and accounted for as the catalyst base.
Metals – principally noble metals – that are recovered at the end of the useful life
of each catalyst batch are carried only as working capital and, therefore, appear in
the production cost summary only as an interest item.
Small metal losses incurred when the spent catalyst is reprocessed and the cost of
reprocessing itself can also be amortized over the useful life of the catalyst, but are
most often handled as operating expenses.
Catalyst stockpiled as inventory for future use is part of the working capital.
Working Capital
Working capital items are those items that:
• Require an additional front-end investment even though they are not part of the
physical plant
• Accrue additional interest charges, usually in the form of short-term loans
• Can be recovered at the end of the useful life of the project
For timing purposes, working capital is usually assumed to be available upon
completion of construction. The following items comprise the working capital in
most economic studies:
Additive items
• Feedstock inventory
Includes the supply of raw materials valued at delivered prices. Excluded are any
materials that are not normally stored (gases, e.g.). Unless specified otherwise, a
0.5-month supply or equivalent liquid and solid feedstock storage is assumed.
• Finished product inventory
Comprises the inventory of all principal products and by-products, if any, valued
on a gross cost of production basis. Again, a 0.5-month storage is assumed unless
differently specified. Excluded too are items that are not normally stored (e.g.,
hydrogen or light ends).
• Accounts receivable
Typically, it is assumed to consist of 1 month’s worth of production. Production
includes main products, by-products, and any other items that might be sold on a
regular basis.
• Cash on hand
Typically estimated as the equivalent of 1 week’s cash flow.
• Adsorbent, catalyst, and metals
Normally, only those items that are fully recoverable, and thus not amortizable,
are part of the working capital. Typical is the inventory of noble metals in the
plant.
750
D.S.J. Jones and P.R. Pujado ´
time!
Those metals that are not recovered and are disposed of with the catalyst base are
treated as an integral part of the catalyst and accounted for as the catalyst base.
Metals – principally noble metals – that are recovered at the end of the useful life
of each catalyst batch are carried only as working capital and, therefore, appear in
the production cost summary only as an interest item.
Small metal losses incurred when the spent catalyst is reprocessed and the cost of
reprocessing itself can also be amortized over the useful life of the catalyst, but are
most often handled as operating expenses.
Catalyst stockpiled as inventory for future use is part of the working capital.
Working Capital
Working capital items are those items that:
• Require an additional front-end investment even though they are not part of the
physical plant
• Accrue additional interest charges, usually in the form of short-term loans
• Can be recovered at the end of the useful life of the project
For timing purposes, working capital is usually assumed to be available upon
completion of construction. The following items comprise the working capital in
most economic studies:
Additive items
• Feedstock inventory
Includes the supply of raw materials valued at delivered prices. Excluded are any
materials that are not normally stored (gases, e.g.). Unless specified otherwise, a
0.5-month supply or equivalent liquid and solid feedstock storage is assumed.
• Finished product inventory
Comprises the inventory of all principal products and by-products, if any, valued
on a gross cost of production basis. Again, a 0.5-month storage is assumed unless
differently specified. Excluded too are items that are not normally stored (e.g.,
hydrogen or light ends).
• Accounts receivable
Typically, it is assumed to consist of 1 month’s worth of production. Production
includes main products, by-products, and any other items that might be sold on a
regular basis.
• Cash on hand
Typically estimated as the equivalent of 1 week’s cash flow.
• Adsorbent, catalyst, and metals
Normally, only those items that are fully recoverable, and thus not amortizable,
are part of the working capital. Typical is the inventory of noble metals in the
plant.
750
D.S.J. Jones and P.R. Pujado ´