USA Fixed Assets


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When coming up with a fixed asset capitalization policy, do you look at the price point they are on the individual basis or aggregate.

If you buy a material amount of "fixed assets" but their value is only 200 on an individual basis, would this be something you can still capitalize?

Thanks for the help.

Mike
 
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I would say individual basis, with exception of projects.

Let's say you have a capitalization threshold of $5,000. If you buy 6 computers and they are invoiced at $6,000 ($1,000 each). I would expense this out.
 
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Fidget

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Accounting standards allow both, but it would be wise to keep the aggregate option as part of your accounting policy because once it's implemented, you need a good reason to change it. So if your policy rules out aggregate capitalisation, you could be storing up trouble further down the line.

The overall policy should largely depend upon the size of the organisation, so you have to develop it with the organisation in mind, e.g a £50k outlay is a drop in the ocean for some organisations, but is massive for others.
 

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