What expense category does repairing equipment come under?

There are a few different expense categories that repairing equipment could come under. It depends on the type of equipment being repaired and the business' accounting methods. The most common categories are:

Cost of Goods Sold

If the equipment being repaired is used in the production of goods or services, then the repair cost would be classified as a Cost of Goods Sold (COGS) expense. This would be the case for manufacturing or production equipment, tools, vehicles, etc. that are used directly in the production process.

Repair and Maintenance

If the equipment being repaired is not used in the production of goods or services, then the repair cost would be classified as a Repair and Maintenance expense. This would be the case for office equipment, furniture, IT systems, etc. that are not used directly in the production process.

Capital Expenditure

If the equipment being repaired is a fixed asset of the business, then the repair cost would be classified as a Capital Expenditure. This would be the case for buildings, machinery, vehicles, etc. that are long-term assets of the business.

The correct expense category for repairing equipment will depend on the type of equipment being repaired and the business' accounting methods. However, the most common categories are Cost of Goods Sold, Repair and Maintenance, and Capital Expenditure.

The information provided in this article does not constitute legal or financial advice and is for general informational purposes only. Please check with an attorney or financial advisor to obtain advice with respect to the content of this article.

Let Ramp automate your expense categorizations

Error Message
No personal credit checks or founder guarantee
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Tired of manually categorizing expenses? See how Ramp can automate this for you in the demo below