The financial accounting term repairs to property, plant, and equipment refers to a category of cost subsequent to acquisition. Repairs are typically broken down into two subcategories: ordinary and major. Ordinary repairs are typically expensed, while major repairs may be capitalized if certain criteria are met.
Subsequent to assets being placed into service, they oftentimes require additional investments to either improve or maintain their productivity. Repairs are one of four categories of these investments; the others include additions, reinstallations, and improvements and replacements.
To capitalize costs associated with existing property, plant and equipment, one of the following three conditions must be met:
Generally, there are two forms of repairs companies make to existing equipment:
property, plant and equipment, costs subsequent to acquisition, additions, improvements and replacements, reinstallations and rearrangements, disposition of property, plant, and equipment, sale of property, plant, and equipment, involuntary conversions