Lever Arch Files - Capital Expenditure or Expense?

pod

If someone purchases lever arch files to use in an office in the course of business, would these be considered as a business *expense* or a *capital* expenditure?

Perhaps they might be considered as a stationery item, and therefore an expense; or as a lever arch file could perhaps last for several years perhaps they might be considered a capital investment in the business?

Anyone know? Thanks!

nahdoic

A capital expenditure has to be above a certain amount. E2.99 for a lever arch folder would not qualify no matter how many years you had it for.

Victor

Stationary is an ordinary expense and lever arch folders would come under this "rule". Capital expenditure is something (a) that needs to be relatively expensive (b) will be continuously used and depreciate at a low rate. That said a stapler would also be considered ordinary expenditure.

When you think about it, you are going to write something like "Invoices 2003" on that lever arch folder and will not be able to reuse /resell it easily as the writing will depreciate it.

Realistically the simplest forms of capital expenditure would be office furniture and equipment - fax, photocopier, computers (including accessories, but not consumables).

pod

Thanks very much for the help & advice - much appreciated!

slave1

All the replies above are correct, however if this is a startup situation then all start up expenses can be considered capitalisable under a "turnkey" approach, from buildings down to paperclips