USA Capitalization of Consulting Services

[AdrianMiamiCPA]

Can consulting services related to the development of a strategy for maintenance agreements for a recent major equipment purchase be capitalized? The services include: strategize major system types requiring maintenance contracts and review with potential vendors. These services are in direct connection to newly purchased infrastructure equipment.

 

[kirby]

No.
Costs were not related to the equipment but to the service agreement. Service agreements are not capitalized as fixed assets. When they are on the balance sheet it is only because they were prepaid.