Accounting and Bookkeeping
Fixed Assets
Note: Articles published before January 1, 2017 may be out of date. We are in the process of updating this content.
An organization records fixed assets on the books when it purchases items it will use and benefit from for a period of time greater than one year. Before the organization records fixed assets, it should determine the value at which an item qualifies as a fixed asset instead of an expense. Determining the value of a fixed asset is called a "capitalization policy." Typically this value is based on the overall size of the organization. For small nonprofits, an item worth more than $500 to $1,000 is typical for a capitalization threshold.
Fixed assets are broken down into two broad categories:
- real property-typically determined by an appraisal
- land
- buildings
- collection items
- furniture and equipment- determined by the amount paid to purchase the item
- desks
- chairs
- computers
- printers
See also:
- Tips for good management of your organization's fixed assets
- Basic Accrual Concepts
- Depreciation Schedule