A cost for repairing a newly purchased asset is not capitalized, but it considered part of depreciation expense for the first year.

Question

Quizplus · Accepted Answer

Repair costs for a newly purchased asset are typically expensed and not capitalized unless they materially increase the value or extend the useful life of the asset. Depreciation expense is calculated on the asset's capitalized cost, not including repair expenses.

A Cost for Repairing a Newly Purchased Asset Is Not