Business Bookkeeping – New Purchase as Asset or OpEx?

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More finance than Econ but whatever. Let’s say I buy a new laptop for $2k. That’s $2k as an operating expense for equipment on my P&L, right?

Do I also count that $2k as an asset on my balance sheet? But if I do that, I can’t consider it OpEx, right? So then do I consider the depreciation of the laptop as my OpEx? If so, how do I even calculate what the “useful life” of a laptop is?

Sorry, trying my hand at a balance sheet for my small business and am finding myself stressed.
Thanks for the clarity in advance. I need to revisit my old college accounting textbooks apparently.

In: Economics

Anonymous 0 Comments

If you’re going to depreciate it, you count it as an asset. If not, it’s opex, or operating expense.

Depreciation is considered an expense when it’s deducted. I’m not sure I’ve ever heard it referred to as opex, though.

If the asset will have a recoverable cost at the end (sold, for example), you don’t want to depreciate beyond that residual value. Otherwise, you depreciate to zero.

That laptop would usually be an opex, so they could take the full deduction that year. USA federal tax law has a minimum $2500 to be considered an asset, I believe.