Major Carmaker Co. plans to build a laboratory dedicated to testing car crashes. The company will not use the laboratory after the project is finished.
Under GAAP, how should this laboratory be accounted for?
A) Capitalized and depreciated
B) Expensed when acquired
C) Capitalized, but not depreciated
D) Depreciated and expensed
E) Capitalized at its original cost and then tested for impairment annually

Question

Quizplus · Accepted Answer

Project-directed or highly-specific research buildings and equipment with no alternate uses must be expensed as incurred.