USA Capitalize Cost of Removal of prior asset?

[FooserX]

Hey guys!

Situation:
Hospital is installing a new call system on the floors as well as other new features.
They have to demo out the old system as part of this.

Should the Demo costs be expensed or capitalized?

I feel like the answer is expense, but want to be sure.

Thanks!

 

[Kat Maple]

Hi FooserX

The demolition costs are part of the cost of installing the new system and should be capitalized. But remember to also write off any undepreciated book value of the old call system as it is now gone.

Regaards,

Kat