Your company provides a number of staff with lap-top computers, as well as pocket calculators. It capitalizes the cost of the computers and depreciates them over several years, but writes off the cost of the pocket calculators in full, against profits, in the period in which they are purchased.
The main justification for this difference in treatment is:
- Computers last longer than pocket calculators
- The company has always adopted this treatment, and therefore must be consistent with the treatment of previous periods
- The cost of pocket calculators is not material
- Pocket calculators do not decrease in value