Inspired Accounting

For businesses, capital assets are property that is useful for longer than a year and is not intended for sale during the regular operation of the business.

Generally, these assets are used to generate revenue for the business and are expected to do so for longer than a year.

Buildings, computers, vehicles, etc. can all be considered capital assets.

When these assets have been owned for longer than a year they incur capital gain. If they are damaged, stolen, or become obsolete it is a capital loss.

The purchase of these assets is considers a capital expense. In most cases the cost of capital assets must be deducted over several years through depreciation.

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