Taxation of Business Entities 2017 8th Edition Spilker Solutions Manual

Page 76

Cost Recovery 

Businesses must capitalize the cost of assets with a useful life of more than one year on the balance sheet rather than expense the cost immediately Also known as depreciation, amortization, or depletion – depending upon the underlying nature of asset Business use these methods to recover cost of assets due to wear, tear and obsolescence of assets 2-3

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