Finding Text
2023-2 Property and Equipment not Capitalized
Condition: Management failed to capitalize expenditures that yield benefits over an extended period of time.
Criteria: Management is required to prepare financial statements in accordance with generally accepted accounting principles.
Cause: Transactions were expensed in the accounting records.
Effect: Misrepresentation of financial position of the Project. The invoice in the amount of $29,356, which were for repairs under an insurance damage claim, was capitalized during the audit.
Recommendation: I recommend management properly capitalize property and equipment according to their capitalization policy.