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determine a reasonable per acre value of the land in question. Work with
Accounting to establish the appropriate value.
Betterments, Improvements and Repair and Maintenance

A. Betterments

A betterment materially renovates or enhances a previously capitalized asset
without introduction of a completely new unit. Alterations that change the
physical structure of assets (e.g., cutting new entry and exit openings or closing
old ones; erecting new walls, windows and partitions or removing old ones) but
neither materially add value to the asset nor prolong its useful expected life should
be charged to maintenance expense. Examples of betterments include:

• Enhancement of an old shingle roof through the addition of
modern, fireproof tiles

• “Major catch-up” repair to or rehabilitation of an existing
neglected asset that extends the useful life or substantially
increases the value of the asset.

A betterment that meets the capitalization threshold in Section VIII should be
capitalized.
B. Improvements

Improvements include additions of new components to previously capitalized
assets that either increase the assets’ value, extend the useful life, increase the
normal rate of output, lower the operating cost, or increase the efficiency of the
existing asset. Replacements of components of existing capitalized assets with
improved or superior units, such that the value of the assets is increased, are also
classified as improvements.

Examples include:

• Installation of an air condition system where there previously was
none

• Installation of a crane on a truck that did not previously have one

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