DOES US ACCOUNTING TREAT ‘FURNITURE’ AS A FIXED ASSET (SUBJECT TO DEPRECIATION) OR AS A CONSUMABLE ITEM?

Under US GAAP, is ‘Furniture’ treated with colour as the bound object (i.e., is it theme to depreciation) or is it created off as the consumable item?

{ 3 comments… read them below or add one }

v b May 1, 2010 at 2:10 pm

For a business, it’s a fixed asset.

Jss May 1, 2010 at 2:43 pm

It is a fixed asset.
You can go for section 179 deduction. Section 179 is not allowed for purchases related to rental property. IRS Publication 946: How to Depreciate Property?

Herrmann May 1, 2010 at 3:16 pm

It really depends on the cost. While it is technically “furniture and fixtures”, you wouldn’t waste your time depreciating a $15 waste basket. If you buy 25 $15 waste baskets, though, then you’d capitalize them. Most practices have a “rule of thumb” (an amount they compare against) to determine if they expense or capitalize.
In the practical world, your “rule of thumb” is around $100; under and you expense, over and you capitalize. Though some firms might go higher.

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