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When is an expense a fixed asset?

  • 10-09-2014 10:41AM
    #1
    ted.crilly
    Registered Users, Registered Users 2 Posts: 6 ✭


    This is probably a question for the accountant, but since I can't get hold of him right now, I will ask here to see if I can get a quicker answer (Which I will verify!)

    I understand that large capital purchases are fixed assets and get depreciated e.t.c. What then is small enough to just be an expense. In the context of a small office, a photocopier is clearly not an expense, but an asset. What about a 100 euro superstrong staplier, what about a 100 euro printer with a 1 year expected life. Expense or fixed asset?


Comments

  • #2
    GR3YFOXXX
    Registered Users, Registered Users 2 Posts: 54 ✭✭GR3YFOXXX


    Anything with a life of less than a year, expense. Quick and fast rule.


  • #3
    tenifan
    Closed Accounts Posts: 523 ✭✭✭tenifan


    I probably wouldn't capitalise anything that only cost €100 anyway. Especially not a stapler.


  • #4
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    tenifan wrote: »
    I probably wouldn't capitalise anything that only cost €100 anyway. Especially not a stapler.

    Agreed - the principle of materiality is still relevant.

    You're either going to charge as a €100 expense in one year or €20 every year for the next 5 years as Depreciation. Unless a very small business I'd treat as an expense in the year incurred.

    Some countries do have a very low level where items must be capitalised.

    You're right to question it.


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