Asset or expense
A payment is an asset when its benefit reaches beyond the current period, and an expense when its benefit is used up within the period.
Benefit beyond this period? Yes → record an asset, then depreciate it | No → record an expense now
Why it matters
The same payment lands in different places depending on this one question. Treating a multi-year purchase as an expense understates profit now; treating a routine running cost as an asset hides it.
Where it appears in a CFO+ model
- In the assets section, which holds what is bought once and used for years.
- In the cost lines, which hold what is consumed in the running of the activity.
- The line between the two is a judgement that the model makes visible rather than hides.
Learn the concept in the Academy
Activities where it shows up
- Agriculture & Production
- Café & Coffee Shop
- Catering
- E-learning
- Fintech
- Fuel Station
- Gym & Fitness Club
- Hospital
- International Freight & Clearance
- Maintenance & Technical Services
- Marketplace Platform
- Medical Laboratory
- Metal Machining & Fabrication
- Printing & Packaging
- Real Estate Brokerage
- Real Estate Development
- Tourist Camp
- Tourist Resort
- Training & Development
- University or College
No figures are published: a definition and a formula only.