How to record components used to build a computer

Hi there, David43.

This computer component or the computer as a whole can be recorded as a fixed asset. You'll have to use the Fixed asset manager feature to track your depreciation. I'll show you the steps where to set up this feature in QuickBooks Desktop (QBDT).

1. In your QBDT company, go to the Accountant menu.
2. Click on the Manage Fixed Assets.
3. Follow the on-screen instructions.
4. Wait till there will be another window to prompt.

Now you can add your asset, for more information in using this feature, check out: Use Fixed Asset Manager in QuickBooks Desktop.

However, if you are unsure of which option to choose, I'd suggest consulting your accountant for assistance. This is to make sure that your books are accurate.

Let me know if you have any concerns. I'll be here to help. Take care.

How expensive is the total of the parts to make it turn on? Less than $2500 and you would not have to record it as a fixed asset but simply expensed as small office equipment. Computers and other business equipment including printers if less than $2500 per line item can be direct expensed without being fixed assets at all but consumables and direct expensed without ever going on a depreciation schedule.

Part of this reasoning is that electronics now become obsolete almost as soon as they come out of the box and certainly sooner than a traditional 5-7 year depreciation. - Think about your cellphone and how often you buy new - like most of sum, every two years - and cellphones are more expensive than the majority of full size computers.

John-Pero,

Well, the total cost of the PC that I built was >$4000 (it is a nice PC), but I spent less then $2500 in 2019 and also less $2500 in 2020.  

I'm working on my 2019 corporate tax return (my company is an s-corp.) right now.  So far I have expensed the costs for 2019 since it was less than $2500 (thanks again for you previous input on this in another thread).

Can I just expense the 2020 costs in 2020 and ignore the fact that the completed PC cost more than $4000 total?

Thanks,

David

Thank you MarsStephanieL,

Since the total cost of components to build the PC in 2019 were less than $2500, I have now expensed those parts for 2019.

However, there is a complication in that with the additional component costs in 2020 the total cost of the PC is now >$4000.

Do you have a suggestion on how I should handle this? 

Thank you,

David

Hey, @David43. 

I want to make sure you get the best answer to your question about recording components used to build a computer. I'm unable to advise you on which route to take, but you can consult with your accountant to receive the best accounting advice for your unique business. 

Let us know how it goes and if you have any other questions, don't hesitate to ask. The Community is always here to lend a helping hand. Bye for now!

I received quite a bit of help from the community.  I realize that the situation is complicated enough that I really need to talk with an accountant.  

However, until I can talk with an accountant I have chosen to expense all of the components and to "not" treat the completed PC that I put into service in 2020 as a fixed asset.  The total cost was about $4000,  $2400 in 2019 and $1600 in 2020.

I have had several questions over that past several days as I cleaned up my QuickBooks records and prepared my 1120S return using TurboTax Business and have received very quick and helpful responses.

Thank you all!