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Capitalisation Threshold

A minimum cost a company sets, below which an item is expensed rather than capitalised as a fixed asset, even if it otherwise meets the definition.

Related terms

  • Books of Account

    The complete set of financial records a company is legally required to maintain under Section 128 of the Companies Act, forming the basis from which the financial statements are prepared.

  • Capital Work-in-Progress (CWIP)

    Costs incurred on an asset under construction or development that has not yet been brought into use, carried separately from completed fixed assets.

  • CARO (Companies Auditor's Report Order)

    An order under the Companies Act requiring statutory auditors of specified companies to report on additional matters beyond the standard audit opinion — fixed assets, inventory, loans, statutory dues and more.

  • CARO Clause 3(ii) — Inventory

    Requires reporting on whether physical verification of inventory has been conducted at reasonable intervals, and whether any discrepancies of 10% or more in aggregate for any class of inventory were properly dealt with in the books.

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