The next step is bottling, which involves filling the bottles and adding labels and a cork or a screw-top cap. Then there’s the cellar operation, where the juice is kept in tanks to let the sediment drop out, followed by fermentation, and then bulk aging in oak barrels or stainless steel tanks.
There’s the crush phase, where the grapes are crushed. At any rate, most of these expenditures are capitalized, up to the point when commercial production begins. The up-front investment is pretty incredible, which is why mostly rich folks own vineyards. And then there’s vine planting, and setting up windbreaks, and installing a trellis system, and training the vines to grow on the trellis system – and so on. That’s because it takes time for a site survey to figure out how to configure the vineyard, and decide on what types of vines to plant, and then extract rocks, and grade the land, and possibly fumigate the soil, and add fertilizer, and drill wells, and lay down an irrigation system – and that’s before planting any vines. The problem is that it can easily be a half-decade – usually longer – before it begins to produce grapes in commercial quantities.
Even though a vineyard is on the cash basis, it needs to capitalize quite a lot of its initial expenditures.
