THEORY OF REPAIRS, MAINTENANCE, AND BETTERMENTS.
The need of an accounting for depreciation of capital assets is generally recognized. It is known, however, that depreciation and repairs are related, for, to establish a reasonable depreciation rate, it is necessary to consider the policy pursued relative to repairs, since repairs affect the useful life of property. Proper treatment of depreciation is not possible if a neglectful policy in regard to repairs is pursued. Also an inadequate depreciation policy is liable to render unsatisfactory any attempt to treat repairs scientifically. The word "repairs" has been used with so many varying meanings that its place in the terminology of accounting is questionable. Sometimes it is used synonymously with "maintenance," sometimes synonymously with "renewals," sometimes in a sense different from either maintenance or renewals. As distinguished from additions and betterments, repairs render a machine better than it was immediately before such repairs were made, yet they do not constitute a betterment, because they do not lengthen the life of the machine and do not make it essentially mere serviceable. Repairs prevent the loss of service which a machine normally possesses and result in more efficient operation, both present and future.
- DOI
- 10.2308/tar-7042134
- Volume
- 18 (3)
- Pages
- 259-261
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref