Can you explain the reason why we capitalize an expense and depreciate it as against writing it off in the period that the expense was incurred. Give an example.© BrainMass Inc. brainmass.com June 4, 2020, 12:48 am ad1c9bdddf
To capitalize means to record as an asset and not show it as completely used up already (used up = expense). So, if what we buy isn't used up yet, it has value in future periods, we capitalize it and depreciate it in the period when it is used up.
I would not say we are "capitalizing ...
200 words in everyday language suitable for a novice. Example transaction given to illustrate how this works.