Costs incurred subsequent to the acquisition of an asset are capitalized if it is probable that the company will obtain future economic benefits.

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This statement is in accordance with the International Financial Reporting Standards (IFRS) and generally accepted accounting principles (GAAP). Any costs incurred after the acquisition of an asset that are expected to generate future economic benefits are capitalized, rather than being expensed immediately. Some examples of costs that can be capitalized include additions, improvements, and replacements.

Costs Incurred Subsequent to the Acquisition of an Asset Are