NPO Tangible capital assets held HB 4431

Question 1

How are capital assets initially measured?

Answer 1

HB 4431
* Purchased capital assets – cash outlay for the assets, including any additional expenditures related to making the assets operational (installation fees, legal costs for procurement, etc.) is the cost

• Donated capital asset – the fair value is used to record the cost of the asset at the time of the contribution. Additional expenditures to make it operational are also included in the cost.

Question 2

Are capital assets amortized?

Answer 2

HB 4431
* Yes, unless and entity applies the exemption for small organizations (see below) all capital assets other than land must be amortized of the period of expected use

‒ If the average gross revenue of an NPO for both the current and previous year is less than $500,000, then the NPO does not have to capitalize its capital assets