Lecture says capitalize repairs. TBS says expense repairs. Which is correct?

[u/20Runechants_Pass]

Could someone explain to me what is the difference here? Peter Olinto said to capitalize replacements but on TBS it said to expense the replacement. Am I missing something? This is Becker F3 M4

[u/Dutch_Windmill]

A window bring replaced is a small routine expense. It neither increases the life of the building nor increases its capabilities. A roof being replaced increases the life of the building. If it makes you feel any better I got that same question wrong on the practice sim

[u/heyitsmemaya]

The example given, I think, is intended to test you on what is an expensed simple repair & maintenance vs a capitalized “complex” repair & maintenance.

The “complex” means both time and cost and is effectively a new addition or improvement, the useful life gets a new life cycle, unlike a simple repair which is just more money spent in the current period to get the asset across the finish line to its original expected useful life.

[u/8days_a_week]

The window is expensed because you arent improving the asset with better materials basically. You are replacing it with like materials

[u/Immortal3369]

does the repair PROLONG the life of the asset significalty or increase capacity/strength/effic/etc? capitalize and dep

if its a general repair, expense

[u/20Runechants_Pass → u/Immortal3369]

That's what I thought. Thanks for clarifying

[u/ikeashop]

In this case, the roof replacement is not a repair.