Your client has just purchased land on which it intends to build a vineyard. In doing so, the client incurs
Your client has just purchased land on which it intends to build a vineyard. In doing so, the client incurs the following costs:
1) land surveys;
2) costs of leveling the land;
3) installation of fencing;
4) installation of a sprinkler system.
Refer to industry guidance in the Codification to determine whether these costs should be capitalized and whether there are restrictions surrounding the capitalization period. Also, educate your client on how the Codification classifies these different types of costs. Finally, locate one other example of a cost that may be capitalized and explain any restrictions on the period during which the cost may be capitalized.