Ask Experts Questions for FREE Help !
    Gardngal's Avatar
    Gardngal Posts: 1, Reputation: 1
    New Member

    May 24, 2006, 11:24 AM
    Company costs
    When running a small business is it better to capitalize some if not most of the costs and incur amortization expenses year over year or expense them all in the period they are incurred realizing the whole costs
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
    Ultra Member

    May 24, 2006, 03:18 PM
    Capitalize or Expense?

    The age old question. Well, that and which came first, the chicken or the egg?

    Sometimes there is a black and white answer. The answer is either Capitalize or Expense. It is a clear answer.

    However, most of the time, it is a grey area. Good arguments can be made for either.

    It will depend on many circumstances.

    For example, R & D (research and development). Capitalize or Expense? If the project (eg drug) pans out, capitalize it, but if it fails, then expense. But, you do not know, so you will have to made some educated decisions based on information.

    There is also tax planning to consider, income statement presentation, etc.

Not your question? Ask your question View similar questions


Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.

Check out some similar questions!

Fixed costs vs. Variable costs [ 1 Answers ]

Can someone please check my answers. -Classify each of the following items of factory overhead as either a fixed or a variable cost. (Include any costs you consider to be semivariable within the variable category) a. Indirect labor- fixed costs could be variable under certain circumstances b....

Help - external costs [ 6 Answers ]

Okay. Here's a situation, and I cannot find any external costs. Can someone help me please? A huge superstore wants to open up in a small town. This will result in nearly all local SMEs to shut down, and will result in a net loss in employment. Also, the store is locating in a cheap, shoddy...

External costs [ 1 Answers ]

If a company chooses to outsource production to a cheaper country, what would be the external costs? I believe pollution in the new country would be, but how about the job loss in the initial country?

Joint custody costs [ 3 Answers ]

I am recently divorced. We have a 14 yr old daughter that wanted to go to the mall one Friday afternoon that they had a day off school. She comes to my house every weekend and on wednesdays. We have joint custody. She called me and asked if her and her 2 friends could go. When they had their...

View more questions Search