This policy establishes the standards and procedures for ensuring that a company's accounts for capital assets and depreciation are in compliance with management’s objectives and GAAP. Detailed procedures are included for acquisition and capitalization, depreciation, transfers, retirements and disposals, and financial and physical control.
In this sample, it is the company’s policy to capitalize the cost of computer equipment, furniture and leasehold improvements exceeding a specific amount (including tax, freight, installation, etc.) that meet certain guidelines. Normal repairs and maintenance costs should be expensed as incurred.