Buildings
Long-term tangible assets representing structures owned by a business, recorded at historical cost and depreciated over their estimated useful lives.
Buildings
Long-term tangible assets that represent structures owned by a business, recorded at historical cost and depreciated over their useful lives.
For instance, a manufacturing company might record a factory building at its $2 million purchase price plus $500,000 in improvements, depreciating this amount over the building’s 40-year estimated useful life.
Buildings are typically recorded separately from the land they occupy because land is not depreciated. Building costs include purchase price, closing costs, renovation expenses, and significant improvements that extend the useful life. Regular maintenance expenses are not capitalized but expensed as incurred.