A company performs ordinary repairs and capital improvements on its equipment. How should these be accounted for under GAAP and IFRS?

• A. Ordinary repairs should be expensed, while capital improvements should be capitalized.
• B. Both ordinary repairs and capital improvements should be expensed immediately.
• C. Both ordinary repairs and capital improvements should be capitalized.
• D. Ordinary repairs should be capitalized, while capital improvements should be expensed.

Answer: (A)