[Lnc-business] Motion for a Capitalization Threshold

[Tim Hagan]

I will have a motion during the Treasurer Report or as new business,
whichever the Chair prefers. The motion is to amend the Policy Manual
Section 2.03, Subsection 6, Fixed Assets, by adding two paragraphs to
the beginning of the subsection: 

A fixed asset is defined as a unit of property or equipment that: (1)
has an economic useful life that extends beyond 12 months; and (2) was
acquired or produced for a cost of $2,500 or more. Fixed assets must be
capitalized and depreciated for financial statement purposes. 

The threshold amount for minimum capitalization is $2,500. Any items
costing below this amount should be expensed in the financial
statements. 

This came up with the purchase of a new water heater for the office, on
whether it should be capitalized and depreciated or shown as an expense
in the financial statements. We don't have a written policy for a
capitalization threshold. Our auditor, Mark Frye, said the IRS lets
companies and organizations to set their threshold for capital expenses
as high as $5000, but he suggested $2,500 as a reasonable figure. 

-- 
Tim Hagan
Treasurer, Libertarian National Committee
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   I will have a motion during the Treasurer Report or as new business,
   whichever the Chair prefers. The motion is to amend the Policy Manual
   Section 2.03, Subsection 6, Fixed Assets, by adding two paragraphs to
   the beginning of the subsection:

   A fixed asset is defined as a unit of property or equipment that: (1)
   has an economic useful life that extends beyond 12 months; and (2) was
   acquired or produced for a cost of $2,500 or more. Fixed assets must be
   capitalized and depreciated for financial statement purposes.

   The threshold amount for minimum capitalization is $2,500. Any items
   costing below this amount should be expensed in the financial
   statements.

   This came up with the purchase of a new water heater for the office, on
   whether it should be capitalized and depreciated or shown as an expense
   in the financial statements. We don't have a written policy for a
   capitalization threshold. Our auditor, Mark Frye, said the IRS lets
   companies and organizations to set their threshold for capital expenses
   as high as $5000, but he suggested $2,500 as a reasonable figure.

   --
   Tim Hagan
   Treasurer, Libertarian National Committee