Capitalising the costs
Scenario:
Our company has recently purchased a working dog; so my question is, are we able to capitalise the cost of purchase, training and possibly dog food expense?
Explanation:
The cost of acquiring a working dog is a capital expense. The dog is effectively an asset and the cost is written off over the working life of the animal. Associated costs such as food and veterinary bills are deductible under s 8-1 as incurred (see Private Binding Ruling 1012183165120). The cost of training a dog is not an allowable expense (It is a capital expense incurred preliminary to obtaining the benefit) (see Interpretative Decision ID 2011/28).