An asset's capitalized cost basis includes only the actual purchase price; whereas the other expenses associated with the asset are immediately expensed.

Question

Quizplus · Accepted Answer

The statement is false. An asset's capitalized cost basis includes not only the actual purchase price, but also other expenses associated with the acquisition or construction of the asset, such as legal fees, appraisal fees, and installation costs. These expenses are added to the purchase price and then depreciated over the useful life of the asset.

An Asset's Capitalized Cost Basis Includes Only the Actual Purchase