gregster:
In simple terms what you have done by repairing the transmission on the car has made the car worth more and extended the period of time that you could use the car.
For example : If the book value (for accounting) of the car was $2500 before the transmissin failed you have increased that to $4000 and extended the useful life of the car from lets say 2 years to 5 years (using the Straight line method). The method of ammortization used (straight line or declining balance) also determines the amount and length of time the repairs would take to be fully ammortized.
Sorry gregster your guess on this one is a little off base. According to Generally Accepted Accounting Principles (GAAP) when you make repairs to a piece of equipment those repairs add to the value of the equipment and extend the expected life of the equipment. The ammortization of the repair would then be done over the new expected life of the equipment.My guess is that you amortize the repair over a single tax years time, not one pay period.
In simple terms what you have done by repairing the transmission on the car has made the car worth more and extended the period of time that you could use the car.
For example : If the book value (for accounting) of the car was $2500 before the transmissin failed you have increased that to $4000 and extended the useful life of the car from lets say 2 years to 5 years (using the Straight line method). The method of ammortization used (straight line or declining balance) also determines the amount and length of time the repairs would take to be fully ammortized.
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