Accounting principles and practices, by contrast, define a capital expenditure
as an outlay of significant value resulting in the acquisition of or an
addition to property.4 In the United States,“significant value” can be $1,000,
several thousand dollars, or somewhat more, depending on the size of the
jurisdiction. In the United States, financial reporting requirements under the
Governmental Accounting Standards Board’s Statement 34 (1999) have led
many jurisdictions to use $5,000 as the limit for significant value, for the
purpose of identifying capital expenditures and assets. If an item costs less
than the significant dollar threshold, the expenditure for it is a current or
operating outlay, even though it results in the acquisition of property that is
used over many years.
Accounting principles and practices, by contrast, define a capital expenditureas an outlay of significant value resulting in the acquisition of or anaddition to property.4 In the United States,“significant value” can be $1,000,several thousand dollars, or somewhat more, depending on the size of thejurisdiction. In the United States, financial reporting requirements under theGovernmental Accounting Standards Board’s Statement 34 (1999) have ledmany jurisdictions to use $5,000 as the limit for significant value, for thepurpose of identifying capital expenditures and assets. If an item costs lessthan the significant dollar threshold, the expenditure for it is a current oroperating outlay, even though it results in the acquisition of property that isused over many years.
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