This policy establishes the minimum cost (capitalization amount) used to determine the capital assets recorded in GitLab's financial statements.
A “Capital Asset” is a unit of property that has an economic useful life extending beyond 12 months and was acquired (or in some cases, produced) for a cost of $1,000 (USD) or more. Capital Assets must be capitalized and depreciated for financial reporting purposes.
GitLab establishes $1,000 (USD) as the minimum amount required for capitalization. Any item with a cost below this amount or an economic useful life of 12 months or less, is expensed on the date of purchase.
All capital assets are recorded at historical cost as of the acquisition date. These assets are depreciated on a straight-line basis, with the number of depreciation periods being determined by asset class.
Equipment: For our purposes, equipment generally consists of computers and other related office tools. Equipment under our INC entity is assigned a standard useful life of three (3) years. However, equipment under our BV entity is depreciated over five (5) years due to Dutch tax laws, which limit depreciation of capitals assets to a maximum of 20% of the asset cost per year. The following link contains additional information on Dutch tax laws surrounding capital and fixed assets: Netherlands Capital and Fixed Assets Guide
Furniture: Furniture includes office furniture and other fixtures. The standard useful life for furniture is seven (7) years. This depreciation schedule applies to all entities.
Invoices and purchase receipts for capital assets are retained for a minimum of five years.