Topic Thread

Capital Equipment Purchases

  • 1.  Capital Equipment Purchases

    Posted 04-12-2018 11:05
    Team CFMA,

    I am wondering what policies and procedures you have in place for new capital equipment purchases. We are considering updating our current procedures and I am interested in what my peers are doing. Discussion Points:

    • Dollar limits for approval
    • Approval Chain
    • Forms (Examples would be appreciated)
    • Software solutions/procedures (We are a Viewpoint user)
    We are a mid sized heavy civil contractor. I look forward to the discussion and I thank you for your responses in advance!

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    John Kapphahn
    Chief Financial Officer
    Rachel Contracting
    St. Michael MN
    (763) 424-1500
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  • 2.  RE: Capital Equipment Purchases

    Posted 04-12-2018 12:36

    I would like to be included on this discussion as well. We are in the same process.

    Thank you,



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    Stephanie Pompeo
    Controller
    Wharton Smith Inc.
    Lake Monroe FL

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  • 3.  RE: Capital Equipment Purchases

    Posted 04-20-2018 19:04
    John,

    Hopefully you'll get some responses from someone with relevant content.  I think there will be a wide range of policies and procedures depending on what percentage of the capital assets are purchased by the company owner versus an equipment manager.

    Regarding the accounting side of fixed assets:

    Companies should discuss a capitalization policy with their tax accountant.  I generally encourage companies to maximize their capitalization threshold to what IRS allows. This simplifies asset tracking, especially as assets age and get partially parted out or combined with other assets.  I would still setup a equipment tracking policy separate from the capitalization policy that defines what is setup in EM Equipment Master versus capitalized.  For example, a $1,200 cutoff saw may be tracked as a piece of equipment, but not capitalized and repairs & maintenance may be tracked to a small tools repair equipment # rather than the actual equipment #.  This depends on the level of detailed required for each company's needs.

    I've found it useful to create a custom validation in Vista to warn AP clerks if they are trying to code items below the capitalization threshold to fixed assets accounts.  I've posted an example on the LinkedIn Viewpoint Group.
     ​​

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    Kevin Halme
    Constructive Tech Solutions
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