According to GFOA recommendations, what is the minimum cost for capitalization of a project?

The Government Finance Officers Association (GFOA) recommends a minimum capitalization threshold of $5,000 for governmental entities. This threshold is established to ensure that not all expenditures are capitalized, but rather only those that meet certain materiality and useful life criteria. Capitalizing expenditures allows governments to better manage their long-term assets and align financial reporting with the actual utility of those assets.

By setting this threshold at $5,000, GFOA recognizes that it balances the need for proper asset tracking and financial accountability while also minimizing the administrative burden that would arise from capitalizing smaller expenditures. This recommendation serves to create consistency in financial reporting across governmental entities, enhancing transparency and comparability.