Asset or Expense

Definitive rules on what should be considered an asset

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I work for an organisation that rents out a number of properties, from houses to office space .. I am looking for a definitive source I could access which would help us to reclassify certain items that the Auditors say should be classed as assets but which i feel should be Expenses..is there a minimum amount before an item should be considered s an asset ?     eg . fridge purchased for £200 asset or expenses .... roofing repairs  of £5000   asset or expenses 

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By paul.benny
25th Apr 2022 13:13

You'll be wanting FRS102, then for a definitive source. Or even The definitive source.

But it doesn't specify values. Businesses need to determine their own capitalisation policy taking into account the materiality to the business. Bear in mind you should really be able to track the assets you've capitalised and remove them from your asset records when they're disposed of.

Lower value items and major repairs are areas where tax and accounting treatments may deviate. It may be that your auditors are placing more emphasis on the tax treatment.

You should discuss with your auditors and get them to help you devise a fit-for-purpose accounting policy.

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