The installation costs for a new machine should be part of the cost of the machine and should be depreciated.

Question

Quizplus · Accepted Answer

The installation costs for a new machine are necessary expenses for putting the machine into service, and thus they should be included in the cost of the machine for depreciation purposes. Depreciation reflects the reduction in value of an asset over its useful life, and including installation costs in the depreciable basis of the machine will spread their cost over the same period as the machine, resulting in a more accurate representation of the asset's true cost and useful life.

The Installation Costs for a New Machine Should Be Part