Should Office Renovations be Capitalized?

Author: James Adkins

Below are some guidelines concerning which renovations would be considered eligible for capitalization based on GAAP guidelines.

Can Be Capitalized:

Permanent changes, updates, or additions to the office proximity are likely to qualify for capitalization. These could include:

  • Movement of walls
  • Add-ons, such as floors or additional building facilities
  • Windows
  • Major equipment repairs
  • Utility upgrades
  • Major Landscaping
  • Full-office renovations (including changes in electrical wiring, plumbing, and total-room renovations)

Cannot Be Capitalized:

Non-permanent changes or services that are frequently required at an office are not likely to qualify for capitalization. These services include:

  • Janitorial services
  • Lawn-mowing
  • Parking-lot cleaning
  • Room painting
  • Vacuuming
  • Flower planting
  • Snow removal
  • Duct cleaning
  • Fire-alarm or CO2 alarm replacements

Businesses should carefully consider which assets are capitalizable and should consult with a financial or real estate advisor concerning the best plan for their business. At Adkins Building and Construction, we are committed to educating clients on the best plan of action for their companies. For more information regarding capitalization, visit our website at

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