Repairs and maintenance expense

Repairs and maintenance expense is the cost incurred to ensure that an asset continues to operate. This may involve bringing performance levels up to their original level from when an asset was originally acquired, or merely maintaining the current performance level of an asset. Expenditures required to increase the performance level may result in the capitalization of the additional costs. For example, replacing the oil filter in a truck is considered a maintenance cost, while replacing the roof of a building extends the life of the building, and so its cost will be capitalized.