Capital goods are those that a company purchases for multi-year use, as they contribute to the activity for a period longer than one year. Think of a building or a machine, a computer, accessories. Their use in business activity is multi-year, so the cost initially incurred, perhaps in a single solution, must be spread over the years in which these assets contribute to the production of the operating result. To this end we speak of depreciation, which is nothing more than an accounting and tax practice, on the basis of which the cost of an asset is spread over several years.
Think of a computer, when we say that its cost can be amortized over 5 years, it means that it must be divided by 5 and a fifth of it participates in the business result every year, or in each financial year it will be charged for a fifth of the total . Clearly, it may happen that there is discrepancy between the civil law for the purposes of the financial statements and the fiscal one, in the sense that an asset can be considered depreciable in a certain number of years for the first and for a different number of years for the second. It is not a peculiar aspect of depreciation, as those who have even the slightest rudiments of accounting know well.
It is clear that if the company were to be allowed to deduct 100% of the cost incurred for an instrumental asset in a single year, it would incentivize its purchase from a fiscal point of view. Let’s take the aforementioned example of the computer, which instead of being amortized over 5 years, can be fiscally deducted in a single year. Well, the company, instead of waiting 5 years to deduct the purchase cost, will be able to discharge it from taxes in a single solution and this would represent a considerable tax advantage. To avoid dragging on even modest costs relating to capital goods for years, the tax authorities admit deductions in a single year of purchases of an amount lower than 516.46 euros, excluding VAT.
Returning to the definition, capital goods are all tangible and intangible assets intended to be used by the core business. As mentioned, they are factors with a medium-long cycle of use, for which the respective costs are the responsibility of several years or several years, while they can offer a revenue to the company, if it were sold to third parties in the disinvestment phase, once their function for production purposes. They can be linked to technical production activities, such as for plants, machinery and equipment, to sales and administrative activities. As for the purposes, they can limit themselves to replacing worn-out goods, buying a new computer instead of an old one, or increasing productivity by making production more efficient, but they can also increase company production,
The company can acquire capital goods by way of ownership, buying them from third parties, receiving them for use with free loan, leasing, rental, construction in economy or usufruct contracts.
Capital goods can be divided by nature or destination. Capital goods by destination are those used exclusively in the business. They are used directly by the entrepreneur within the production process as a property or other real right. Those by nature, on the other hand, are those goods that would not be susceptible of other use, if not through a radical transformation. The distinction between the two categories has practical implications, because capital goods by nature are always depreciable, even when they are not used directly in the production cycle.
As for the methods of acquisition, the lease is the contract by which the owner of an asset grants it to a tenant, in this case, the company, upon payment of a periodic fee. In this case there is no depreciation, because the company has not incurred a cost for the purchase of the capital asset, but can also deduct from the costs those relating to the lease payments paid during the year.
Instead of resorting to leasing, the company can lease an instrumental asset, which consists in the possibility of using it against the payment of a periodic fee, generally inclusive of maintenance and insurance costs, with the option, at the end of the period, to redeem the asset by paying a maxi fee. The advantage of leasing is to enjoy the capital asset equally, as if it were owned, but without immobilizing all the necessary funds in a single solution.
