|
|
|
|
Expenditures that increase operating efficiency or capacity for the unit’s useful life or increase the unit’s life should normally be capitalized. Expenditures made keeping the unit in efficient operating condition, such as, cleaning, oiling and adjusting or, expenditures made replacing any part to maintain the existing unit are normally regarded as costs, chargeable to operations. Kohler’s Dictionary for Accountant’s defines capital expenditures and expense as:
Capital Expenditures ....the term is generally restricted to expenditures that add fixed asset units or have the effect of increasing the capacity, efficiency, span of life or economy of operation of an existing fixed asset. (Any expenditure benefiting a future period)
Expense ....class term for expenditures recognized as operating cost of a current or past period. (Any expenditure the benefits from which do not extend into the future) |
Send questions or comments to
mail@hilgerflick.com
|
