Manufacturing
Major Overhaul (Asset Life Extension)
Capitalizing a significant repair that increases the output or life of a machine.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Machinery & Equipment | Asset (+) | 12,000.00 | - |
| Cash / Bank | Asset (-) | - | 12,000.00 |
💡 Accountant's Note
Minor repairs are expensed. However, a major rebuild that makes a machine 'better than new' is capitalized and depreciated over the new remaining life.
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