When to stop assigning costs to a fixed asset
/A recurring accounting question is when to stop compiling the costs of a new asset and including them in its capitalized cost. The basic rule is to only recognize costs in the carrying amount of a fixed asset until the item is in the location and condition for it to be capable of operating in the manner intended by management. This means that no further costs should be added to a fixed asset once the asset achieves this status, even if it is not yet actually used in the manner intended by management. After that point, costs are not assigned to a fixed asset unless the related activity prolongs the life of the asset or increases its utility.
