Firms treat expenditures as assets when they:
A)have acquired rights to the future use of a resource as a result of a past transaction or event.
B)can reliably measure the cost of the expected benefits at the time of initial recognition.
C)can exercise the entity's right to, or control of, the benefit.
D)can obtain the future service potential and control others' access to it.
E)all of the above

Question

Quizplus · Accepted Answer

All of the options mentioned are criteria for treating expenditures as assets. The firm must have acquired rights to future use of a resource, be able to measure the cost of expected benefits, exercise control over the benefit, and obtain future service potential while restricting others' access to it. Therefore, all of the criteria mentioned in the options must be satisfied to treat expenditures as assets.

Firms Treat Expenditures as Assets When They