Looking for a little clarity here. I understand that expenses that generate benefit in future periods can be capitalized, but I'm unclear on specific examples of what can and can't be capitalized . Any help?作者: zephyranalyst 时间: 2011-7-11 19:21
ftwcfa Wrote:
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> Looking for a little clarity here. I understand
> that expenses that generate benefit in future
> periods can be capitalized, but I'm unclear on
> specific examples of what can and can't be
> capitalized . Any help?
Buy an equipment - if the equipment is expected to provide benefits for this period only, it has to be expensed .. else capitalized
While constructing a project - you borrow money to fund it ... you have to pay interest .. interest could be expensed in every period or capitalized and becomes part of your project's value that will be depreciated over time作者: wizofoz 时间: 2011-7-11 19:21
Thanks Omar - that's a good example. Any other obvious ones I'm missing, or is capx for PPE the main one?作者: YAhmed 时间: 2011-7-11 19:21
R&D could also be an example for capitalising expenses.
However, both IFRS and US GAAP set specific guidance on when R&D expenses should be capitalised (relating to feasibility of the product and the intend to use or sell it, if I remember right).
