Exposure Draft on Accounting for PP&E Costs Released.

An exposure draft of a proposed statement of position, Accounting for Certain Costs and Activities Related to Property, Plant, and Equipment, has been issued by the Accounting Standards Executive Committee. The proposed SOP would provide guidance on accounting for certain costs and activities related to property, plant and equipment (PP&E) in financial statements prepared in conformity with generally accepted accounting principles. A final SOP would be effective for fiscal years beginning after June 15, 2002, though earlier adoption is encouraged.

The committee drafted the proposed SOP to address diversity in accounting for expenditures related to PP&E, including improvements, replacements, betterments, additions, and repairs and maintenance. The proposed SOP addresses accounting and disclosure issues related to determining which costs related to PP&E should be capitalized versus which should be charged to expense as incurred. The proposed SOP also addresses capitalization of indirect...

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