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a manufacturer acquires a machine that should go through a major overhaul every three years .the total price for the equipment is 1 million .

a manufacturer acquires a machine that should go through a major overhaul every three years .the total price for the equipment is 1 million . it is estimated that the overhaul will cost 200,000. It is estimated that the machine has a useful life of ten years . what is the correct treatment of the 200,000 expenditure in year 3?

a- recognize an asset of 200,000 and amortize over three years.

b- recognize an expense of 200,000

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