Ask Your Mates Open Forum

Painting of Buildings

  • 1.  Painting of Buildings

    Posted 18 days ago
    ​Hi all,

    Just wondering other peoples views on the painting of buildings, both interior and exterior. Do you capitalize these costs or are they considered to be more along the lines of maintenance and repairs? Any views and opinions would be greatly appreciated.

    Thanks in advance


  • 2.  RE: Painting of Buildings

    Posted 16 days ago
    Josh

    I always took the view that external was capitalised as it maintained or extended the useful life of the building, whilst internal was mainly aesthetic/cosmetic and treated it as routine maintenance.  Often the decision was based on value of the works.

    ------------------------------
    Julia Smethurst
    julia.smethurst@sa.gov.au
    ------------------------------



  • 3.  RE: Painting of Buildings

    Posted 15 days ago

    I agree with Julia, but as mentioned it would depend on your capitalisation threshold and the level of componentisation - external structure and internal walls.

    For us it is over $5k, so you need to do a reasonable amount of painting to get over that threshold.

    Cheers 




  • 4.  RE: Painting of Buildings

    Posted 15 days ago
    Agree with Julia - you could tie yourself in knots agonising over the decision and having interesting philosophical discussions, but ultimately it may come down to what your internal cutoff is for capitalising works.

    Private sector you would be more likely to treat it as a repair and write it off as an expense against tax, different scenario though for LG.


  • 5.  RE: Painting of Buildings

    Posted 15 days ago
    Hi Joshua,

    If the project is solely painting, we consider it a maintenance expense, regardless of internal or external painting, as it is only allowing the asset to reach its useful life, not extending it. We have this identified in our AMP and LTFP, and we budget accordingly for the treatments when they are due.

    Mark.

    ------------------------------
    MarkMatthewCity of Charles SturtManagement Accountant AMSmmatthew@charlessturt.sa.gov.au08 8408 1111
    ------------------------------