Dow Chemical Corporation plans to build a laboratory dedicated to a special project. The company will not use the laboratory after the project is finished. Under GAAP, this laboratory should be:
A) Capitalized and depreciated.
B) Expensed in the current year.
C) Depreciated and expensed.
D) Capitalized only.
E) None of the above

Question

Quizplus · Accepted Answer

Under GAAP, if the laboratory will not be used after the project is finished, the cost should be expensed in the current year as it does not provide future economic benefits beyond the current period.

Dow Chemical Corporation Plans to Build a Laboratory Dedicated to a Special