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July 7, 2008

How do I record exterior cement work? Is it an asset or an expense?

If the cement work was done to repair or maintain existing cement work, then the expenditure should be recorded as an expense. Even if the cost is very large, repairs and maintenance must be expensed. The cost of repairs or maintenance cannot be recorded as an asset.

If the cement work is an addition or an improvement (more than repairing or maintaining existing cement work), the cost of the cement work is viewed as a new asset. If the amount is significant, you should record the expenditure as an asset and then depreciate the cost over the useful life. However, if the amount of the addition or the improvement is relatively small, the accounting concept of materiality allows you to expense the entire amount immediately.

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6 Responses to “How do I record exterior cement work? Is it an asset or an expense?”

  1. soliy on July 8th, 2008 4:52 am

    accounting principle

  2. salman on July 10th, 2008 5:23 am

    hi,
    can u plz tell me that what do we do with credit and debit note amount, mean to say is that how do treat these two in accounting system based on oracle?

  3. Nadeer Chandroth on August 17th, 2008 10:49 pm

    Book value of building is 1 million (stright line method to be depreciated in 20 years, original value was 10 million), it is depreciated for 18 year. now I am planning to repair the same building in order to use for another 5 years from now. Can you guide me how to reord the repair cost, calculation of depreciation for repair, and existing cost.

  4. Ashok on April 5th, 2009 5:00 pm

    Dear Sir,
    What will be the treatment for those Revenue nature expenditure like printing & stationery, Electricity used, travelling expenditure etc. incurred on constructing a long term assets i.e.
    Capital work in progress)
    Thanks

  5. Judy on August 18th, 2009 11:10 pm

    Hello Sir,
    I have debated whether or not to capitalize a sizable repair to a sewer treatment plant. The repair will, in fact, improve the function of the plant; however, the repair is also necessary to continue the function of the plant. Should I capitalize or expense?

  6. Tarantino on November 4th, 2009 9:55 am

    Our Homeowners group is in a 5-year process of replacing asphalt driveways by our carports with concrete.  Last year we used $150,000. and this year we’ve used $300,000.  We still have approx. 40% leftto replace.  The money has come from two accounts, 42% infrastructure reservesand 58% unrestricted cash.  Can we consider the concrete an asset to be depreciated over 40 - 50 years?  Would thisoffer us a balance sheet or tax advantage?  What would bethe advantage or disadvantage of creatingthis asset.  I’ve been told we would have to establish a new reserve for the replacement of the concrete in 40 - 50 years.  But if wemaintain it with our regular infrastructure reserves would that be true?

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