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About LinkBacksWe bought some computers and we want to depreciate them over 3 years. Under what account/category of assets should I put them? Now they are labeled as "Equipments", would that be an efficient way?
Computer as assets, what should the category be called?
We bought some computers and we want to depreciate them over 3 years. Under what account/category of assets should I put them? Now they are labeled as "Equipments", would that be an efficient way?
Expensing vs Depreciating Computer Equipment
I thought the rule changed regarding computers (IRC sec. 179 deductions).
Computers are 'expensed in current FY unless 50% personal use rule apply's (see "Listed Property") or
qualifying under specific regs. relating to systems like NASA and Google. If your company spent less
than $10,000 to purchase the computers, treat the transaction as an intra-year expense.
Last edited by Helse; 10-27-2009 at 06:21 PM.
Every company should develop a policy on that defines categories and includes dollar amounts for capitalization or expense. They should decide based on their needs as there is no limit on the number of accounts that can be created.
Some would create an account/sub account described as office equipment or computers while others have only one account. Its all about control/tracking and information needed for internal and/or tax reasons. Some will have fixed asset systems that supports the ledger while others work strictly off the ledger entries.
As with any system the more information input on the front end will return more information on the back end which of course has an associated cost to gather and maintain.
Tax vs Ledger Accounting
Pat,
We responded to an identical question with separate conclusions and interpretations. You
ledger accountants are so different, no wonder I bash my head against the wall when I
return from an audit.
Inventory and control personnel are the worst. I swear they speak Excel/QB/Access in Klingon.
You can put it under equipment or just make up a new account called computer equipment. It really doesn't matter at all. Most likely they will all be lumped together on the balance sheet anyway.Originally Posted by gbsaco
thats interesting, i havent seen that yet and kpmg hasnt mentioned it to me in respect to this years tax return. I think 179 is ok if you have a great year, but i prefer being conservative and getting the future value of that depreciation expense.
Yea, I would say its up to you and how you want to keep track. Very good suggestions above about accelerated depreciation.
Last edited by OC CPA; 12-17-2009 at 04:45 AM.
This is the first time I am reading this new rule. We used to treat computers here as "Furn and Fix" too and depreciated for straight line method in 3-4 years depending on some aspects.
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