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Anonymous Accountant

Asset Capitalization

Asked on Jan. 30, 2018

We are planning on purchasing a significant amount of large metal trays that will be used with our manufacturing equipment. Individually, they only cost about $300, but in total will put us back about $180K - they all will be purchased at the same time. Can we capitalize these as assets or do we have to expense them on the P&L?

Answers

Len Green's headshot
Len Green Performance Improvement Consultant and ERP Strategist • February 8, 2018

What is their useful life?

Ankit Tomar's headshot
Ankit Tomar Pro Advisor • February 9, 2018

Yes I think you have enough assets.

Anonymous's headshot
Anonymous Accountant • February 9, 2018

I'd say 30 years of useful life - they are metal trays that won't ever really deteriorate.

Katherine Simmonds's headshot
Katherine Simmonds Agent • May 15, 2018

I think you have enough assets. However nobody can guess previous what will happen in future.

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