Fixed Asset or Expense?

by Shelley
(Arlington, TX, USA)

We are a non profit church , about to purchase a building on which we will be making some general improvements (bring building up to code, carpet, pews, painting etc).

We have enlisted the help of an architect for design purposes as well. I am not a CPA, but I am a volunteer treasurer keeping the books.

Can someone please tell me if I account for these expenses as part of our "building" as a fixed asset, or do I expense some of these?

I'm about to do this month's bookkeeping and have made the first payment to the architect. Is that an expense or do I begin putting that into the fixed asset account of our "building"?

Thank you so much for the help!!

Comments for Fixed Asset or Expense?

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Oct 07, 2016
Capitalize or Expense?
by: Vickey

I would capitalize the architect's charges. See this article on my other website (It for small businesses, but the same accounting principles would apply to your situation):

Whether or not you expense or capitalize (recording a cost as an asset rather than an expense)will depend on your church's policy. Some have a written policy that everything under a certain amount ... such as $2000 will be expensed.

However, most of the time...pews, carpet, etc. will be recorded a fixed asset.

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Join in and write your own page! It's easy to do. How? Simply click here to return to Accounting.

If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)

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