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When can a repair of equipment/machine be classified as CAPEX?

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Question added by Bilal Khan , Senior Tax Accountant , Finvesco Limited
Date Posted: 2015/08/09
Malik Khalid Mahmood
by Malik Khalid Mahmood , Regional Finance Manager , Leosons International FZ LLC

if it increases the operating efficiency and cost of repair significant amount of economic cost

Abdur Rahim
by Abdur Rahim , Head Accountant , MAPCo. LLC

Expense on repair of equipment/machine can be Capitalized only if :

It increase the production capacity of machine

it increases the Market Value of machine or

Increases the estimated life of machine. 

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