When you think about IT equipment, it could be anything from the hardware and server to cloud services. And while intangible assets like software can be capitalized, many business owners often wonder if they should capitalize IT equipment or expense it. Capitalizing equipment frees up cash flow since the costs aren’t expensed in the period they were incurred. However, it can also lead to potential drops in free cash flow and misleading profit margins.
Learn more about whether you should capitalize or expense IT equipment.