[Verse 1]
When your company spends some money today
Do you write it off or make it stay?
As an asset on your balance sheet
Or expense it out, the choice complete
Future benefits, that's the key
Will this cost help our company?
More than just this fiscal year
Then capitalize, make it clear
[Chorus]
Cap or zap, that's the choice you make
Cap means asset, zap's expense you take
Future value means you capitalize
One year only, then you recognize
Cap or zap, impacts how you show
Earnings high or earnings low
Balance sheet or income statement bound
Cap or zap, the rule profound
[Verse 2]
If you buy a truck to haul your goods
That's an asset, like all trucks should
Spreads the cost over many years
Depreciation then appears
But the gas you put inside the tank
That's expense, don't need to thank
Used up now, no future gain
One time cost, expense remains
[Chorus]
Cap or zap, that's the choice you make
Cap means asset, zap's expense you take
Future value means you capitalize
One year only, then you recognize
Cap or zap, impacts how you show
Earnings high or earnings low
Balance sheet or income statement bound
Cap or zap, the rule profound
[Bridge]
Management might want to hide
Expenses they can't justify
Capitalize when they should expense
Makes the profits look immense
But auditors will check the books
Find the errors, dirty looks
Follow rules, don't play the game
Honest reporting, that's the aim
[Verse 3]
Research costs for brand new tech
Usually expense, what the heck
But development that's nearly done
Capitalize that, you've won
Training costs for your whole crew
Expense those, that's what you do
Building bought to house your team
Capitalize that, live the dream
[Chorus]
Cap or zap, that's the choice you make
Cap means asset, zap's expense you take
Future value means you capitalize
One year only, then you recognize
Cap or zap, impacts how you show
Earnings high or earnings low
Balance sheet or income statement bound
Cap or zap, the rule profound
[Outro]
When in doubt, ask yourself this way
Will it help beyond today?
If the answer's truly yes
Capitalize, don't second guess
If it's used up right away
Expense it out, don't delay
Cap or zap, now you know the way