[Spartans92]

Hey guys so I’ll keep it as general as possible. This relates to macrs. Generally it’s 3,5,7 and so on for life depending property. But if I have a 1 year maintenence contract as a fixed asset addition how should I classify it for macrs? I’m a little confused.

BEC- PASS

[Missy]

I wouldn't put a one year maintenance contract to fixed asset additions. I'd put it to prepaid and expense over 12 months. You don't want to be expensing that over more than the life of the agreement.

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Missy]

Besides the contract itself doesn't improve the asset it's on, or extend the useful life of the asset (only keeps it in it's intended working condition for that particular year) so it's not treated as a fixed asset addition.

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Author]

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