Many manufacturing facilities and distribution centers have depreciation schedules to track high-cost assets that are depreciated over a number of years. These assets usually fall under categories such as factory equipment, tow motors, vehicles, and industry-specific instruments.
Other assets (often termed personal property) are less costly items that are expensed rather than depreciated. Many accountants today use a rule of thumb of $1,000 to determine whether the item is depreciated or considered an expense item. Look around any office, no matter what the industry; you will see tables, chairs, desks, lamps, file cabinets, computers, and printers – all of which are expensed rather than depreciated. An accountant explained that most computers are outdated within 18-24 months, so they can’t justify depreciating them. (more…)