Maintenance and Repairs

Expenditures for maintenance are those required to maintain equipment in good working condition. Repairs are those

expenditures required to bring equipment back into good working condition.  Neither expenditure extends the intended

useful life or changes the intended purpose of the asset. Therefore, costs incurred for maintenance and repairs are not c

apitalized. Floor and wall covering  replacements (e.g., carpet, floor tile, and wallpaper) are considered maintenance and

repairs, except when done in conjunction with a remodeling project.


Betterments are capitalized if they meet the minimum requirements for capitalization as defined in PCS 004. Alterations

made solely for cosmetic purposes are not capitalized.

Replacement Parts

Replacement parts generally do not increase the value and/or intended useful life of an asset. Therefore, replacement parts

are generally not capitalized. However, if a significant increase in value or useful life is provided through a replacement part,

the guidelines for betterments are to be followed.