Cost of Painting New Vehicle

by Gilly

Expensing vs Capitalization

Expensing vs Capitalization

Hi Madam,

I work for an operational lease company. The company bought 5 brand new vehicles. Those 5 vehicles were painted as per customer request (the customer is a courier company). They are leased for a period of 3 years to that customer.

Question - how do I treat the cost of painting? As an expense or do I need to capitalized it?

The painting cost is about 8% of vehicle cost. I expensed it as a sales and marketing expense because it is not a recurring expense. Sometimes regular maintenance and service espenses become more than 9% of the vehicle cost over regular intervals.

Considering this and general capitalization rules, I decided to expense it. Please advise me how to treat it?

Click here to post comments

Return to Unanswered Bookkeeping Questions.

Enjoy A Tea Break With
Me Today. Let's Chat!

Use the search feature to quickly find the
information you're looking for.

Your Learning Curve!


Join Me On Facebook

Help support this site by "liking" me! Here's where I post current information.

Listed Under Websites NOT Local Business.
This website is NOT associated with the business operating in Bonnyville AB.

A Handy Reference