capitalization policy

Small Tools in Construction: Expense It, Capitalize It, or Job-Charge It?

Contractors spend real money on drills, saws, hand tools, blades, and consumables. The question of whether to expense those purchases, capitalize them as assets, allocate them to specific jobs, or treat them through a small tools overhead rate affects job costing accuracy, tax deduction timing, and year-end close. Here's the framework and the tradeoffs.