263A requires taxpayers to capitalize
certain direct and indirect costs and allocate those costs to specific inventory items.
Like the revenue-based methods, the investment method capitalizes
the cost of the policy and the premiums needed to keep it in force, but no income is recognized until the insured dies.
No country is better positioned to capitalize
on these knowledge-based resources than the US.
For accounting purposes the buyer normally sets up a reserve account and capitalizes
many anticipated costs.
The $3-million water-filtration system is a betterment to its physical plant, with a useful life of 20 years, so the company capitalizes
and depreciates its cost over that period.
Barbara's Outfitters capitalizes
certain start-up costs and fully amortizes those costs within the first year of operations.
the costs rather than deducting them from income.