A betterment is an improvement made to a fixed asset in order to extend its useful life or increase its value. Doing so results in an enhanced asset. The cost of a betterment can be capitalized and depreciated over time. Conversely, if an expenditure on a fixed asset does not result in an improvement, then the cost is charged to expense as incurred. For example, adding a garage to a building would be considered a betterment, whereas repainting the building would not.

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