Expenditures extending the asset's useful life beyond its original estimate are capital expenditures because they benefit future periods.

Question

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Expenditures that extend an asset's useful life beyond its original estimate are considered capital expenditures because they provide future benefits. These expenditures are capitalized and recorded as part of the asset's cost rather than being expensed in the current period.

Expenditures Extending the Asset's Useful Life Beyond Its Original Estimate