Any accountants here???

[Adidas410s]

I'm debating with somebody whether or not an acquisition of property, equipment, land, etc would be considered a "capital expinditure." Any help in clarifying would be appreciated.

[ASUFrisbeeStud]

Depends what its all for.

[Bullaholic]

Originally posted by Adidas410s
I'm debating with somebody whether or not an acquisition of property, equipment, land, etc would be considered a "capital expinditure." Any help in clarifying would be appreciated.

I can't believe you, Adidas---what do you suppose your mentor Phil C does for a living? Shame, shame....

[Adidas410s]

k I got an answer elsewhere...and of course...I was right!

[Adidas410s]

Originally posted by Bullaholic
I can't believe you, Adidas---what do you suppose your mentor Phil C does for a living? Shame, shame....

He's retired from the accounting world to be able to spend more time working as a full-time matador in El Paso

[Phil C]

Originally posted by Adidas410s
He's retired from the accounting world to be able to spend more time working as a full-time matador in El Paso

By the way Ad - what was the answer.

[RMAC]

Fubar.

[Phil C]

Originally posted by Adidas410s
I'm debating with somebody whether or not an acquisition of property, equipment, land, etc would be considered a "capital expinditure." Any help in clarifying would be appreciated.

I would say all land, buildings or major improvements (such as paved parking lots, etc) should be capatalized no matter what the costs.
If it is equipment or furniture or vehicles I would capatalized if the cost was $5,000 or more (this is a matter of opinion, of course, and accountants may disagree with the amount.

The reason I think the $5,000 or over threshhold is good is because that amount would account for probably at least 90% of the costs of capital outlay plus depreciation, etc. If you were to capatalize everything from $100 or up you would spend 90% of your time keeping up with items that were less than $5,000. Of course company policy is what counts.

This does not mean you can't keep a record of all items under $5,000. It is just that you won't have to worry about original costs or depreciation and everything but they could still be listed by item and seriel number, model no. etc.

[Phil C]

I feel all items of land and buildings should be included just to keep the record straight. You could have a storage building that costs less than $5,000 but I would include also for the record. But that is just a personal choice.
I also feel that major improvements under $5,000 are not worth capatalizing.

Some items such as lawn mowers wouldn't be capatalized if they cost $150.00 or so but I would still list them just for the record. No need to encourage employees or anyone to accidently walk off with one.

Time for me to go back to the bulls. Ole!

[Adidas410s]

Originally posted by Phil C


By the way Ad - what was the answer.

I was calculating free cash flow on a few of our customers in an analysis that I'm puting together. Long and short...one of them had about $84 million in "purchases of plant, property and equipment" (which my boss and I agreed should be considered a capital expenditure) and about $560 million in "acquisitions of metals service centers and net asset purchases, net of cash acquired" and he didn't think that the $560 million should be considered as well. I felt that it should...confirmed it with a few guys in our accounting dept...and so it shall be.

[Phil C]

Originally posted by Adidas410s
I was calculating free cash flow on a few of our customers in an analysis that I'm puting together. Long and short...one of them had about $84 million in "purchases of plant, property and equipment" (which my boss and I agreed should be considered a capital expinditure) and about $560 million in "acquisitions of metals service centers and net asset purchases, net of cash acquired" and he didn't think that the $560 million should be considered as well. I felt that it should...confirmed it with a few guys in our accounting dept...and so it shall be.

I know you can't give me all the details but based on what you have written I also agree.

[buff4life]

i'm third in state in Accounting so....maybe i can but i doubt it...i'm too lazy to read all the thing

[CenTexSports]

The length of use is also a factor for business purposes. Something that is consumed over less than a certain period even though a large dollar purchase could not be capitalized.

[Adidas410s]

Originally posted by Phil C
I know you can't give me all the details but based on what you have written I also agree.

yeah...i was trying to give enough information while still being vague. Then again...they are a public company so you could just as easily access all of this information from their SEC filings.

[kaorder1999]

my fiancee is an accountant...she can help you....shes not here right now though