If a company chooses to treat small plant asset expenditures as expenses,GAAP are being violated.

Question

Quizplus · Accepted Answer

According to GAAP, small plant asset expenditures (also known as repairs and maintenance) can be expensed in the year they occur rather than being capitalized and depreciated over a longer period of time. Therefore, treating small plant asset expenditures as expenses does not violate GAAP. However, larger expenditures that improve or extend the useful life of a plant asset must be capitalized and depreciated over their useful life.

If a Company Chooses to Treat Small Plant Asset Expenditures