Expensing items with long-term benefits will usually mean that the accounting statements will overstate the company's historical investment,which can artificially lower ROIC in later years,making a business appear less attractive than it really is.

Question

Quizplus · Accepted Answer

Expensing items with long-term benefits instead of capitalizing them will understate the company's historical investment on the balance sheet, leading to potentially higher ROIC in the short term but not necessarily making the business appear less attractive in later years.

Expensing Items with Long-Term Benefits Will Usually Mean That the Accounting