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California Form 3885 Corporation Depreciation and Amortization

California Form 3885 Corporation Depreciation and Amortization

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Instructions and help about california ftb 3885 pdf

Depreciation and amortization. So it's helpful to start backwards with a little bit of a foundation there in talking about operating expenses vs. capital expenses. Operating expenses are those expenses that they hit the P&L or the income statement as they happen. Sales and marketing expenses, overhead, general and administrative expenses, R&D, etc. Those are expensed as they happen and they hit the P&L right then. Capital expenses are different. With capital expenses a company's putting money into assets. Things that they're going to utilize for a while. And in the accounting world one of the fundamental principles in the accounting world is called the matching principle. The accountants want to match the expense of something with the benefit derived from that. So when we purchase an asset that we're going to utilize for a while, the accountants therefore want to capitalize that. They want to spread the expense out over the period

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