Asked by Katelyn Chapman on Jul 04, 2024
Verified
An expenditure that increases a long-lived asset's useful life should be capitalized.
Useful Life
The estimated duration of time that an asset is expected to be usable for its intended purpose.
- Gain insight into the integral parts and processes required for the capitalization of assets and the assessment of their costs.
Verified Answer
ZK
Zybrea KnightJul 08, 2024
Final Answer :
True
Explanation :
According to generally accepted accounting principles (GAAP), expenditures that increase the usefulness or extend the life of a long-lived asset should be capitalized. This means that the expenditure is recorded as an asset on the balance sheet and depreciated over the asset's remaining useful life. Examples of such expenditures may include major repairs or upgrades to equipment or property.
Learning Objectives
- Gain insight into the integral parts and processes required for the capitalization of assets and the assessment of their costs.
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