When is an expense a fixed asset?

ted.crilly

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?

GR3YFOXXX

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

tenifan

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

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.