Parking lot repairs can be capitalized or expensed, depending on the nature of the repair and the amount spent.
If the repair is minor and does not significantly extend the useful life of the parking lot, it is typically expensed as a repair and maintenance expense on the income statement in the year the repair is made.
However, if the repair is significant and extends the useful life of the parking lot, it may be capitalized as a long-term asset. This means that the cost of the repair is added to the cost of the parking lot and depreciated over the remaining useful life of the parking lot.
For example, if a business spends $20,000 to repair and resurface a parking lot, and the repairs extend the useful life of the parking lot by several years, the cost may be capitalized and depreciated over the remaining useful life of the parking lot.
It is important to carefully consider the nature and cost of parking lot repairs when determining whether to capitalize or expense them. Capitalizing repairs can have tax and accounting implications, and it is recommended to consult with a financial professional or accountant to ensure that the repairs are treated appropriately.