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Accounting & Bookkeeping & Small Business Forum
Accounting, Bookkeeping, Marketing, and Small Business Resource
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Justanks
Joined: 11 Sep 2008
Posts: 2
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| Posted: Thu Sep 11, 2008 12:57 pm Post subject: Addition to building in California |
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The company I work for is adding a patio to the building. I've got the construction bill for the work. Do I put the invoice under fixed asset since it is the cost of the patio, or do I put it under expense since it is paying the contractors?
If I didn't explain this well enough please let me know and I will go more into detail. |
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dp1903
Joined: 23 Sep 2005
Posts: 170
Location: Wichita Falls, Texas
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| Posted: Thu Sep 11, 2008 1:30 pm Post subject: |
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| Assuming the patio will last beyond a year and it cost in excess of $500 I would capitalize and depreciate it. If it is expected to last about as long as the building then I would add it to the building cost as an addition and as a sub-account of the building. Assuming it was built in a different year than the building, the yearly depreciation percentage for it will differ from the building. [If it was built in the same year, depending on when it was finished, the depreciation percentage mayl be the same as the building.] |
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