Comment by rbultje
3 years ago
Amortizing makes sense for things that have a huge up-front cost and value over time, like - indeed - a robot, or a laptop, or a house. But salaries are not that, they are a continuous cost. I can take a loan on a house (mortgage), and laptops can be bought on 0% payment plans over 3 years. But how would that work for salaries? I'm forced to take out loans to pay the duplicate tax over salaries (and other minor expenses) over the amortization period. That's the insane bit here.
We do that all the time. If I were to build a power generator, it might take several years. During that time, the salaries of people directly building the project are capitalized. Even when the project is put in service and earning revenue, I still migh capitalize the wages for improvements versus repairs. That’s why what you charge on the time sheets matter, if it’s classified as an operational expense vs a capital expense.