Expense vs. Capitalize


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If a University does a study for a diving platform and surrounding pool would you capitalize it or expense it?
 
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My gut feel would be expense. What is the main purpose of the diving platform and surrounding pool, and what did the study deal with?
 
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This study is to perform a structural survey of the diving platforms, competition pool
bottom, trench drains surrounding the competition pool, and concrete cracking at the
mezzanine level.
 
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It sounds like an expense to me. If the survey led onto a large capital scheme and formed part of the re-design of the pool for example and the associated capital works then there might be reason to capitalise.
 
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I would tend to lean toward classifying it as an expense as well. Unless the University is planning to use the study to build as part of a project the study should be expensed as incurred.
 

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