Hi @Chris Arsenault @Tyler Stiller @Kash Jawed Seen the discussion here and thought I would jump in to confirm what looks like everyone already seems to know. I'm a CPA based in ottawa and what I typically tell my clients is the following to illustrate what is an expense vs capital in natur. See below.
Items to expense would include the following :
- >Costs to restore an asset to its original working condition (i.e stove repair);
- >Reoccurring items (i.e. replacement of filters, lightbulbs, etc.);
- >Useful life of the asset purchased is short or not material (high in cost) such as a showerhead
Items that warrant capitalization are :
- >Assets that have a long useful life (1yr<). Some examples include refrigerator, fireplace, balcony and so on.
- >Incurred costs to bring a property/asset to a condition suitable for use. Common example is costs incurred upon acquisition of a property most commonly renovation costs.
- >Costs that enhance the life of an asset beyond its original useful life such as paving, kitchen reno's, flooring replacement, etc.
Hope this adds some clarity.
