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Do you add the cost of shoring up the floor under the machine to the total...

Do you add the cost of shoring up the floor under the machine to the total cost of machinery?

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Answer #1

Cost of Shoring denotes necessary alteration or adjustment made in the floor to support the Machinery.

Any expense incurred for purpose / use for more than 12 months is considered as Capital Expenditure (CAPEX) and hence cannot be part of income statement; it has to be reported in Balance sheet to c/f for following years. If any such expense is related to an asset and it is meant / used only for that asset, it has to be mapped to the asset and depreciated accordingly.

Thus, in above case, shoring has been made in the floor to support the Machinery So, this CAPEX (Capital Expenditure) has to be added along with Machinery and depreciated accordingly.  

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