Special Costs Included in Asset Cost
Capitalizable Expenditures
Some assets require additional expenditures before they can be used. These costs become part of the asset's capitalized cost because they provide future economic benefits.
- Site preparation.
- Delivery charges.
- Installation costs.
- Professional fees.
- Testing costs before production begins.
- Asset retirement obligations when applicable.
Note
Routine repairs performed after an asset is placed into service are generally expensed rather than capitalized.
Summary
Capitalized costs include all expenditures necessary to place an asset into service.