Capitalisation means the costs to acquire an asset are included in the price of the asset. For example, if a machine has a price of $10 million this value would be recorded in the assets, if there was also a $ 2,00,000 charge for shipping the machine then this cost would be capitalized and included in assets.The asset capitalization policy's threshold for all capital assets is no less than
. $5,000. But we have additional thresholds too:- Property Services Project Costs greater than $35,000. Bike Paths, Signage and Street Lighting annual purchases greater than $35,000. Parking Meters annual purchases greater than $100,000. Land, regardless of the value. Cost normally includes all expenditures that may be necessary to put an asset in condition for use in its intended location. Capitalization is done over the useful life of an asset.
