What costs should not be capitalized to "equipment"?

Question

Quizplus · Accepted Answer

Abnormal waste in testing should not be capitalized to "equipment" because it is not a necessary cost to get the asset ready for its intended use. Capitalization of costs to an asset includes only those expenses that are directly attributable to bringing the asset to the condition and location necessary for it to be capable of operating in the manner intended by management. Abnormal waste does not meet this criterion as it represents inefficiency or loss that exceeds what is considered normal in the production or preparation process.

What Costs Should Not Be Capitalized to "Equipment