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Hi, please may I know whether an accrued expense can be capitalized if it meets the capitalization criteria, but it’s just that it has not been paid?
Thank you.
Not sure what you mean be accrued expense. Normally if you accrue an expense you end up by recognising a liability.
If that doesn’t answer your question, please make up a simple example and I’ll come back to you.
For example, an R&D expense of $ 2,000.00 has been incurred, and it meets the capitalization criteria as a development cost. However, such $ 2,000.00 has not been paid yet. Therefore, can the $ 2,000.00 still be capitalized as an asset though it has not been paid?
Thank you.
Yes it can. In the same way as PPE that I have received but not paid for is capitalised.
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