USA Capital as expense


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Is there ever justification to expense a large (>$1M) Capital project?

Also, have you ever heard of capital projects starting off as expense, and switching back to capital halfway through?

Thanks in advance.
 
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kirby

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I suppose the folks who build Burning Man would expense the project immediately. :p So unless the project will be destroyed immediately I cannot think of a reason it could be expensed.
Can you share what it is you are doing and why expensing it is a hot idea?
 
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I made a new accountant here. Like I said, large renovation projects… Replacing floors… Are being expensed. Other projects are being split between expenseand Capitol.

I know gaap says you cannot expense these… But they are. So I am researching all the accounting theory here. I was told by one of the managers that it is not OK to capitalize expenses… But if a company wants to take the expense hit all at once… It is 0K.
He also said gaap are just guidelines… Not legal rules that must be followed. I think he is nuts but I’m trying to have an open mind

as to why a company would want to do that...hmm...I suppose there would have to be some benefit to making the financial statements look worse for them?

either way… I feel like you cannot pick and choose what is capital and what is expense?
 
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I guess what I am asking is… A company knows the difference between expense and capital… Is making the decision to go against gaap, accounting fraud?
 

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