USA Capitalize or Expense

[FooserX]

Hey guys! TIA

I'm looking to determine if a few projects should be capitalized or expensed:

1 - Installing new TV mounts in rooms. This moves the tvs from a dresser to the wall to clean up cords

2 - An energy study on a building to determine energy savings in the future, but not tied to any particular project.

3 - Removing a dumbwaiter

4 - Replacing leaky pipe in multiple areas of a building

I feel like I am finding different decisions depending on the link I pull up on the net.

Thanks!
Scott

 

[ivc303]

I assume #2-4 should be expensed.

 

[FooserX]

I thought so too - thanks!

Although the capital proposal for the removal of the dumbwaiter references safety reasons....which seems to be a significant variable in some links

 

[onebadasset]

Based on your capitalization policy, and the cost of the project, I would say that #1 would be expensed as well.

 

[FooserX]

Thank you for your response...I was thinking the same, too but it seemed like a grey area because if they are installing "new" mounts - aren't they adding value to the building? Even though it doesn't extend the useful life.

Now if they are just relocating the current mounts, that doesn't seem like it would be capital.

Also, the mounts do not obviously exceed the $5K threshold for a capital asset, but in aggregate they do for the entire project proposal.

In regards to the policy, it's not adding value to the building in terms of adding revenue...though it is adding value of patient satisfaction.

Hmm...it does seem to be expense, doesn't it.

 

[Fidget]

I would:

1. TV Mounts: Capitalise these if the cost is within capitalisation policy on the basis that they qualify as fittings.
2. Energy study: Expense this on the basis that it doesn't qualify as a tangible/intangible asset
3. Dumbwaiter: Expense this on the basis that no asset arises from this cost and consider whether a write down of PPE is required as well on account of its removal.
4. Leaky pipes: Expense this on the basis that it qualifies as maintenance.