Capitalization threshold

In accounting, capitalization threshold means the written dollar amount, and minimum useful lifeFixed assets & leasesUseful lifeThe period over which an asset is expected to contribute to cash flows, which sets the depreciation period — an estimate, revised prospectively, below which an entity expenses a purchase that would otherwise be an assetFoundationsAssetA present right of the entity to an economic benefit (FASB CON 8 ¶E16). GAAP sets no amount — its provisions need not be applied to immaterial items; many US companies align it with the IRS de minimis safe harborTaxDe minimis safe harborAn annual tax election to deduct, rather than capitalize, tangible property costing up to $2,500 per invoice or item — $5,000 with an applicable financial statement — provided the books expense the same amounts under an accounting policy in place at the start of the year.