Question
In: Accounting
the cost of repairs to business property: a. must be capitalized if the repairs maintain the...
the
cost of repairs to business property:
a. must be capitalized if the repairs maintain the working
condition of the property
b. must be capitalized if the repairs substantially improve
the asset
c. must be expensed if the repairs materially prolong the life
of the asset
d. must be expensed in the year paid
Solutions
Expert Solution
Answer - b. must be capitalized if the repairs substantially improve the asset
Explanation -
As per IRS, the cost of repairs that improve the asset or add to the value of property is considered as the capital expense and these will be capitalized with the business aseet.
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