What should you capitalize along with the contract price of the equipment you just bought?

“All expenditures incurred in acquiring the equipment and preparing it for use,”

is the very short answer from Danny Oertle in his post at Nonprofit GPS, Not-for-Profit Organizations Acquiring New Fixed Assets – What Should You Capitalize?

If there’s much more involved than just opening the shipping box and putting it to use, you probably need to capitalize more than the amount on the invoice.

Check out the list of the other costs that should also be capitalized.

He also provides the technical accounting definition of what ought to be capitalized.

When you think about the definition, it shows why the capitalized costs of buying software or developing a web site should be capitalized and should include more than just the software.  There are detailed, specific rules for software.

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