Capitilising computer expenditure help needed

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in AAT member discussion
Hi

Please could I have some advice please?!
Our accounting policy is to capitlise items costing over £250. We have recently had some new monitors, memory upgrades and 1 new PC unit and all this is included in 2 invoices from our supplier valued at £1270 and £695.

Invoice 1 - Labour (installing) £ 300
PC Unit £ 410
Monitors, mice, keyboards £ 560
= £1270

Invoice 2 - Labour (installing) £ 150
Printer £ 260
Monitors, paperport £ 285
= £ 695
The only items costing over £250 are the PC Unit and Printer, all other items are max £100.
Should I capitilise the whole value of both as system upgrade, or just the 2 items? Its just that last year when I capitilised some tools costing around the £250 mark the accountant who prepares our final accounts said that he preferred not to capitilise items (!?) Could I put the whole lot through revenue expenditure? What would you do?

Thanks very much
Zoe

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Capitilising computer expenditure help needed

    Multiple post
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Capitilising computer expenditure help needed

    How are the IT items already on the Fixed Asset Register organised?

    Some FAR registrars have IT networks as an asset, and increase (or decrease) the value of such an asset by the value of items (and installation labour) added to the network, or removed from it when items are disposed of.

    Others tend to add terminals, servers, etc separately, i.e. as separate assets. Those individually falling below the capitalisation threshold are expensed.

    £250 seems awfully low for a capitalisation threshold! But if that's your company's policy, you have to be consistent.

    I'd check out how the current IT is treated on the FAR. And if you don't have a network, no servers etc just standalone PCs then I'd only put on the individual items worth over £250. Certainly things like mice and keyboards shouldn't count - they tend to break anyway so are virtually consumables!

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