Asset capitalisation level for larger company

Monsoon

Normally, if an asset is more than £3-500, depending on the size of the business, I capitalise it, as opposed to putting it through as a revenue expense. I might push this up to £1000 if the company turns over £500k or so.

If a company turns over £2million - what is a decent capitalisation level?

PGM

We turnover about £4m, and capitalise at £2k.

It works well, but if we buy a bunch of items like PC's, we'll add up the cost and capitalise the job lot.

Rinske

We got a bigger turnover (apparently our company considers that confidential so not mentioned here), but still capitalise at £ 500.

I know it sounds silly, but it also depends on what it is. If a lot of it is bought together it is more likely to be capitalised, even if it is for a lot less (opening of a new location etc).

If it's a single item, it still will be capitalised for £ 500 or more.

Monsoon

Thanks, that's really helpful

PGM

Rinske wrote: »

We got a bigger turnover (apparently our company considers that confidential so not mentioned here), but still capitalise at £ 500.

Won't that information be freely available in your statutory accounts anyway? Not that I want it

PAMDILL

I used to work for a large construction company, (no longer trading) , turnover was really high and the rule of thumb was capitalise at £1,000 unless it was an item which was easy to move and nick from site. The last proviso was due to the amount of items which would vanish off site even with security in place. Therefore items such as those, i.e. transformers, whackers, mixers were treated as tools even if over £1,000.

Rinske

Yep it is, if you do a google search on the company and turnover you'd find it as well, but...