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Can Maintenance Agreements Be Capitalized

The benefits of maintenance costs should not exceed twelve months, while the investments should benefit the owner of the asset for a period of more than 12 months. If you have a maintenance contract that costs $50,000 a year and is paid out at the beginning of the year, can you spend the entire amount at the time of payment or should the current part of the month be spent and the rest recorded in prepaid and amortized over the term of the contract? Does GAAP allow you to taste everyone at the same time? Repairs or other costs not activated should not be charged to the aforementioned groups of account codes. Unfunded account codes in the 682005 – 682115 account code area will be inactivated in fiscal 2011. In order for capital repair and improvement projects to be properly regularized, projects must be analyzed from the outset and properly classified. This analysis determines whether the project is an ordinary repair or an improvement to be capitalized. If the project is considered a capital improvement, the asset class (equipment, buildings, infrastructure, funcural improvements) must be determined. . . .

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