Accounting · Odoo glossary

Asset Capitalization

Asset capitalization records eligible expenditure as an asset instead of immediately expensing it.

Definition

In general ERP practice

Asset capitalization records eligible expenditure as an asset instead of immediately expensing it. The amount recognized and subsequent depreciation follow the business’s accounting policy.

In Odoo

Odoo records eligible purchases in an asset account and can create asset records using configured account automation and asset models. An asset model supplies depreciation assumptions; selecting an asset account does not by itself establish that an expenditure qualifies for capitalization.

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