Originally Posted by SolarGuy
Isn't there a difference between expensing and capitalizing?
yes definitely;Management typically has some discretion in determining if the cost of an item should be capitalized to the balance sheet and depreciated to the income statement over time or if the cost of the item should be fully expensed to the income statement in the current period. In general, any expenditure that is expected to provide economic benefits for multiple accounting periods should be capitalized.When a cost is capitalized, it is reported in the balance sheet as an asset. The cost is then allocated to the income statement over multiple periods as depreciation expense for tangible assets and amortization expense for intangible assets.On the other hand, if a cost is expensed in the current period, it reduces the pre-tax income by that amount.