We capitalize repairs and maintenance expenditures because they maintain a given level of benefits.

Question

Quizplus · Accepted Answer

Repairs and maintenance expenditures are expensed because they are considered ongoing expenses related to keeping an asset in its operating condition, rather than improving its overall value. Capitalizing expenditures means adding their value to the cost of the asset, which would result in a higher value on the balance sheet, but it would not accurately reflect the asset's true value. Therefore, repairs and maintenance expenses should be expensed, not capitalized.

We Capitalize Repairs and Maintenance Expenditures Because They Maintain a Given