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What is the different between expenditures for repair are 'expenses' and expenditures for improvement are 'capitalized'?
Wiki User
∙ 12y ago
Repairs only restore an asset to the value it previously had, while improvements increase the value of an asset. If the air conditioning unit in a house broke, its value would drop; once repaired, it would be restored to the same value as it had before it broke. But if an entirely new AC system was installed in a house that never had one (an improvement), it would increase the value of the home beyond its original value.
Wiki User
∙ 12y ago
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