Question
A client has a material balance in property, plant, and equipment. The discussions with management indicate that there is a risk the client will capitalize
A client has a material balance in property, plant, and equipment. The discussions with management indicate that there is a risk the client will capitalize all repair costs to minimize the impact on expenses. Repairs are likely to be material because of the extreme weather conditions aff ecting operations and machinery operating conditions. Extensive repairs were due to commence in the month prior to year end, with completion around two months later. Based on the above information, what accounts and assertions are likely to be aff ected? Explain.
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