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Capitalizing
The company I work for had some service done to the air conditioning system that extended the Fixed Asset's useful life by at least 1 yr. The improvement cost about $3,000. Is there a legal rule on how long we can amortize this $3,000 capitalization? My boss thinks there is a rule of 18 or 24 months.
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The question is aleways whether maintenance significantly extends usefull life, in this case it would seem it doesn't. You should also look at the expenditure in relation to the capital cost of the system and the age of the system, $3,000 expended on say a $100,000 dollar system is not significant, extending teh life of a 10 year old system for example is not significant
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