Explore BrainMass

Capitalizing vs Expensing for Roper Corporation

Roper Corporation purchased 100 storage boxes for the office. The boxes cost $15 each and should last ten years.

Argue against the capitalization of the boxes. Your arguments should be grounded on the Conceptual Framework, emphasizing the objectives of financial reporting and the qualitative characteristics of accounting information.

Solution Preview

Under the concept of materiality, the boxes should be expensed in the current period. Many companies establish a capitalization policy which provides a limit under which small items are not capitalized. ...

Solution Summary

The solution explains the theory and the practical application of capitalizing versus expense using one of accounting's basic premises.