Lesson: Equipment Costs

In this lesson, follow along as Nick Palazzolo, CPA, dives into the nuts and bolts of accounting for equipment costs. Tackling everything from initial invoice prices to the nitty-gritty details like freight and installation charges, he lays out the components that makeup acquisition or construction costs. With straightforward, real-world scenarios, Nick illustrates how to handle various expenses, including sales tax and potential construction interest. He also delves into the costs associated with self-constructed assets, parsing out materials, labor, and a portion of fixed overhead, and not forgetting the ever-relevant interest during construction. The lesson wraps up with a practical breakdown of when to capitalize versus expense improvements and repairs, helping to clarify this vital area of asset accounting.