[jicheng]

A company purchased an equipment. On its way shipping to the company, it incurred some repair fee. Should it be capitalized?

Thank you

[Gatorbates]

One would think that shipping insurance would cover the damage.

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[EverybodyswaitingfortheCPA]

Capitalize expenses incurred for installation, shipping, and what is needed to get the asset ready to be placed in service.

Why not just expense the repair?

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[FIFOisbetterthanLIFO]

No, you could not capitalize this. And as gator said, I would hope the product is insured. Depending on the type of equipment, most companies have the seller deliver it to their facility anyways because they do not want to hassle with figuring out how it should be safely delivered. If that were the case, it would be insured by the seller's carrier.

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[jicheng]

Sorry to mention, the fee was paid by the company itself

[Author]

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