Title: GAAP Accounting for Capital Improvements | Bizfluent
Headings: GAAP Accounting for Capital Improvements
GAAP Accounting for Capital Improvements
TL;DR (Too Long; Didn't Read)
Fixed Assets and Useful Life
Repair vs. Capital Improvement in GAAP
Expense and Improvement Bookkeeping
Improvements to Land
Depreciating Capital Improvements
Setting the Cap Limit
Case by Case
Must I Use GAAP?
Capital Improvements and Taxes
Section 179
Bonus Depreciation
Tax Depreciation of Improvements

Content: Land is unique among fixed assets because it doesn't depreciate in value unless you're doing something like mining it for minerals. Land improvements can include demolishing a building, digging a drainage ditch, fencing in the property or landscaping. Even though these changes last longer than a year, they aren't all capital improvements under GAAP: Razing a building doesn't count as an improvement and isn't depreciated. Treat it as part of the cost of the land. Landscaping is always an expense. If you can't set a useful life on an improvement, you expense it rather than capitalize it. If the improvement has a useful life, you report it as a capital asset, entering it in the accounts as land improvement. You depreciate it like other capital improvements. Depreciating Capital Improvements
Under GAAP, fixed assets above the cap limit aren't written off as an expense.