Electricity???

SuejwSuejw Feels At HomeRegistered, Array Posts: 39
One of my clients runs an equestrian business and has just installed electricity on her yard. Do I capitalise this as it is a lot of money- around £6000 but then I cant really depreciate it so is it revenue??:huh:

Comments

  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    Capitalise as an improvement to the premises. There would probably not be depreciation though. It would just remain an asset. Repairs to the electrics later though would be revenue expenses.
  • KernowAccountantKernowAccountant Settling In Nicely Registered Posts: 120
    T.C. wrote: »
    Capitalise as an improvement to the premises. There would probably not be depreciation though. It would just remain an asset. Repairs to the electrics later though would be revenue expenses.

    Why would there "probably not be depreciation"?
  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    Well I would treat it like a new installation of a gas boiler, ie capitalise the initial cost, then revenue expenses for any repairs or replacement of the same.
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