When companies construct their own long-lived assets, all costs required to get the asset into operating condition must be:
A)expensed immediately.
B)included in the long-lived asset's cost.
C)recognized as a maintenance cost.
D)treated as a cost necessary to maintain the plant asset's current level of productivity.

Question

Quizplus · Accepted Answer

All costs required to get a long-lived asset into operating condition, including materials, labor, and overhead, must be included in the cost of the asset. This ensures that the cost is properly matched with the revenue generated by the asset over its useful life.

When Companies Construct Their Own Long-Lived Assets, All Costs Required