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1- Periodic maintenance
2- General repairs
3- Extra ordinary repairs
4- Enhancement to current items
Enhancement to current items is the correct answer
Thanks
It is 4. Enhancement to current items which can be capitalized by amending the existing asset value of that item. Rest all are routine expenses and will go in expenses.
With enhancements to current items you add a fixed value to asset and go on you increase capital.
Thanks
Enhancements to current items are capitalised as per the IFRS, since it increases the capacity of the item.
4- Enhancement to current items. All additional cost that are incurred in ensuring the maintenance and usage of the assets will be treated as expense in the profit and loss account. However any cost that contribute to the enhancement, or improving the production capacity of an asset will be capitalised as part of the cost of the asset.
Answer4 is correct.............
Usually we do CAPAEX in replacement or acquisition of new equipment, new buildings, new facilities, and new business venture. But with your question we need CAPEX on number2-General Repairs.