Title: Capitalization Rules in Accounting | Bizfluent
Headings: Capitalization Rules in Accounting
Capitalization Rules in Accounting
Capital Improvements to Land
Capital Improvements to Buildings
Capital Improvement to Equipment
Capital Improvement to Vehicles

Content: The latter will increase the value of an asset and make the asset worth more upon resale. Building a fence around a parcel of land increases its usefulness as well as its value, and should be capitalized. Capital Improvements to Buildings
Capital improvements to buildings can include a new roof, new flooring, or a new air conditioner. Expenses such as janitorial services, while keeping the building clean, do not add to the life or efficiency of the building and should not be capitalized. Expenses such as new paint or new carpet in a building also do not sufficiently extend the life of the structure. Capital Improvement to Equipment
Any expense that prolongs the life or adds to the efficiency of a piece of equipment should be capitalized. Take, for example, copy machines. New toner would not classify as a capital expenditure. Nor would paper to refill the copier be a capital expense. General maintenance would not qualify either.