Expensing organization costs vs capitalizing
Not what you're looking for?
What is the justification for expensing organization costs versus capitalizing them? What would be some arguments against expensing organization costs?
Purchase this Solution
Solution Summary
The solution presents three reasons to expense and three reasons not. All the reasons are developed for ease of understanding.
Solution Preview
When you say 'expense' versus 'capitalizing', that could mean two things. Organization costs are normally amortized but tax law provides a special Sec 197 to allow direct expensing of the first $5000 of costs incurred. I've attempted to differentiate in the solution to include both expensing and amortizing.
Reasons to expense organizational costs:
1. The costs may be so relatively small that the doctrine of materiality says to expense them directly.
2. Tax law allows expensing of the first $5000, and a ...
Purchase this Solution
Free BrainMass Quizzes
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)