Capitalisation Policy

Auckland Challenge Capitalisation Policy

Version 1.1 — Effective 11/03/2025

Purpose

This policy establishes clear guidelines for determining whether a purchase should be recorded as a capital asset or expensed. Its aim is to ensure consistent financial treatment of purchases in accordance with Auckland Challenge accounting standards.

Policy Statement

Capitalisation Threshold: Any individual item or grouped purchase with a total cost of NZD $2,200 (excluding GST) or more will be capitalised as a fixed asset.

Expense Treatment: Items costing less than NZD $2,200 (excluding GST) will be expensed in the period they are purchased, unless they are part of a larger asset group that collectively exceeds the threshold.

Useful Life: Capitalised assets must have an expected useful life of more than one year.

Examples of Capital Assets: Computers and IT equipment over $2,200; furniture and fittings; office machinery; vehicles.

Examples of Expenses: Low-cost laptops or tablets under $2,200; computer accessories (e.g., keyboards, webcams); software subscriptions; repairs and maintenance.

Review and Approval: All capital purchases must be reviewed and approved by the Operations Administrator and recorded in the asset register.