Consumables, Goods Purchases & Equipment (asset)

Differences

The difference between consumables and goods purchases is that goods are bought to be resold, while consumables are bought to be used within the company. The difference between consumables and equipment is that equipment have a greater value and are used within the company over a longer period.


Consumables

Are materials used in the company and not meant to be resold. What also characterizes consumables is that they are of lesser value and short lifespan. This can range from office supplies for most companies to dish sponges for restaurant owners.

Normally, no inventory is needed as consumables are of lesser value with a short lifespan.


Goods Purchases

Goods purchased for resale are deductible. The entire VAT is deducted directly, but the cost must be periodized. That means an inventory must be conducted, usually at the end of the fiscal year, to assess how much is left in stock. The value of the inventory is reduced from the expenses and is counted as an asset.

If your company uses a simplified annual financial statement, you do not need to adjust for changes in inventory if its value is less than SEK 5,000.


Equipment (asset)

Equipment are assets such as machines, tools and furniture. Cars are also considered an equipment but may have different VAT rules in many cases (read more about cars).

Equipment needed in the company are normally deductible, both the VAT and the cost. However, it's not certain that the entire cost can be deducted directly during the fiscal year. If the cost is of greater value than SEK 28,650 (2024), or if the assets have a longer lifespan than 3 years, they should be depreciated annually. In other words, the cost is divided over several years.