marketing, advertising, accountingMy company purchased a vehicle to help promote the business. It’s being wrapped with company branding. The purchase cost went into a “Vehicle” expense category in QuickBooks. My question is, how should the expenses related to the upkeep & maintenance of the vehicle, as was as cosmetic effects, such as paint/graphics, be accounted? For example, should I make a sub-category under Marketing, lump everything in the new Vehicle category, or something else?
You’ll want to ask your accountant, because the threshold and the amortization period depend on the country (and possibly state if you’re in the US).
In essence, though, there’s a threshold beyond which you must treat an expense as an investment that you then amortize over a time period.
Most likely, you’ll want to book the total acquisition cost as an investment and amortize the latter over a few years, and book the operating costs (i.e. fuel, maintenance, etc.) as expenses.
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