Can you capitalize as fixed assets major repairs and maintenance expense?
by Roger Tamase
Please post your capitalization, depreciation, and fixed asset questions and comments in the following post...
Roger: We are a tax exempt church and we do not depreciate fixed assets. Major repairs and maintenance of the church are always recorded as expense.
Examples are carpeting, A/C & heaters, office equipment, furniture, paintings of buildings, and roofing. Costs are ranging from $1,000 to $12,000.
Can we start to capitalize these expenses paid in 2015? We use the Cash Basis accounting system.
If you do decide to capitalize assets, see this page on my small business accounting site for examples on the journal entries and what would be included in those entries: How To Capitalize Assets
I am currently working with a bookkeeper who is helping us to change to QuickBooks Non-Profit.
Our board is wondering why we are depreciating the assets when we are a non-profit and don't claim it on a tax return as well as if we need to depreciate at all or if we can expense the item straight away.
Your help and any links to requirements in this area would be great. Also, if we are required to depreciate, where would I find out the best methodology to do so? Does QuickBooks do this for you?
I found a couple of good articles for this subject:
Nonprofit Law/Nonprofit depreciation
Churches Recording Depreciation
What is your opinion on these subjects?