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BUSINESS ADVISOR
greater the overall company profit (even if you're a not-for-profit
organization).
So, it seems you'd want to convert the microscope to an asset rather
than an expense. Not that simple, I'm afraid. The IRS has defined
"asset," and you must determine if you can use this to your advantage.
Mind the GAAP
Generally accepted accounting principles — GAAP — define a company's assets as the items it owns or controls that have measurable
future economic value. Quite simply, if you buy something that doesn't fit into that definition, then you can't capitalize it. Buildings, land,
equipment (microscopes), inventory items and money owed to you
from patients (accounts receivable) really do have future measurable
economic values, so you can capitalize them as assets. On the other
hand, advertising, marketing, holiday parties and the like cannot be
capitalized and must be expensed, because they just cannot be measured as having concrete worth.
So, in buying the microscope, you do in fact have an asset that
retains value for the company — not an expense draining money from
the facility. And although our ASC capitalized the microscope, that
doesn't necessarily mean it won't ever have to expense the cost.
Anticipate depreciation
"Hard assets," such as buildings, property and equipment, tend to
D E C E M B E R 2012 | O U T PAT I E N T S U R G E R Y M A G A Z I N E O N L I N E
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