COGS, materials, tools & assets
How we tell the difference between the cost of goods sold, supplies, and a purchase that gets capitalized and depreciated.
COGS, materials, tools & assets
Not every purchase is treated the same way. Cost of goods sold (COGS) is the direct cost of items you resell; materials are raw inputs used to make your product; tools and supplies are consumables. A larger, longer-lived purchase becomes a fixed asset that's capitalized and depreciated over time rather than expensed all at once.
Uplinq generally capitalizes individual purchases above $2,500.
We're expanding this guide
A fuller explainer is on the way.
What this article will cover
- COGS vs. materials vs. tools vs. assets, with examples
- The capitalization threshold and what depreciation means
- Capitalizing repairs that restore equipment to service
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