Extraordinary repairs are extensive repairs to machinery, with the intent of prolonging the life of the machinery. The cost of these repairs should be included in the cost of the fixed asset that was repaired, and depreciated over the revised remaining life of the asset. It may be more practical from an accounting perspective to record the cost of an extraordinary repair as a separate fixed asset, which makes the fixed asset records easier to understand.
An extraordinary repair is not considered to be normal preventive maintenance, which is only intended to make machinery attain its originally intended life span. Instead, an extraordinary repair is targeted at those parts of a machine that will wear out by the expected asset retirement date, so that the machine can continue to function for a prolonged period. Examples of extraordinary repairs are a new roof for a building, a new engine for a truck, and repaving a parking lot.
If the amount spent on an extraordinary repair is immaterial, it is more efficient from an accounting perspective to charge the cost to expense as incurred, rather than adjusting the fixed asset records. Also, if the amount by which the life of the machinery is prolonged is relatively minor (such as a few months), it is also more efficient to simply charge the repair cost to expense as incurred.