When you acquire an asset for your business that is expected to last for more than a year, you usually have to capitalize the cost. This means you put the asset on your balance sheet and then write off the cost over a certain number of years (fixed by law according to the nature of the item) by taking an annual depreciation allowance.
This capitalization rule applies regardless of the cost of an item. So technically, if you buy a $10 handheld calculator, you can’t automatically deduct the cost off the bat because the item is expected to last more than a year.
