Fixed Asset Accountant Mock Interview

Master 30 Fixed Asset Accountant interview questions covering depreciation, capitalization policies, and reconciliations.

Question 28 of 30

After acquisition of a fixed asset, are there any instances when additional costs related to the fixed asset can be capitalized?

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Brian Schuchart

Brian Schuchart is a CPA and Senior Finance Business Partner. His professional experience includes senior management roles with NBC Sports, Virtual Health, and the Children's Hospital of Philadephia.

This question tests your knowledge of the difference between regular repairs and maintenance and improvements to fixed assets that would warrant capitalization. If a cost is incurred to return a fixed asset to its original working condition, it should be expensed as repairs and maintenance. For example, if a machine breaks down, the repair cost should be expensed. If the costs incurred improve the asset, the cost should be capitalized.

Brian Schuchart

Brian Schuchart is a CPA and Senior Finance Business Partner. His professional experience includes senior management roles with NBC Sports, Virtual Health, and the Children's Hospital of Philadephia.

"When assessing whether a subsequent cost related to a fixed asset should be capitalized, I follow the Bigger, Better, Longer rule. If the cost makes the asset bigger, such as an addition to a building, it should be capitalized. If the cost makes the fixed asset better, such as an enhancement to equipment that makes it run more efficiently, it should be capitalized. If the cost extends the useful life of the asset, it should be capitalized. Any other cost should be treated as repairs and maintenance, and should be expensed in the period incurred."

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