Final answer:
Additional costs incurred for demolition, renovation, or repair when a company buys land, a building, or equipment are typically capitalized and added to the overall investment in the asset.
Step-by-step explanation:
When a company buys land, a building, or equipment and has additional costs for demolition, renovation, or repair, these costs are usually capitalized and added to the company's overall investment in the asset. This is because these costs improve the condition or functionality of the asset, and they contribute to its long-term value. For example, if a company buys a building and incurs additional costs to renovate it, the renovation costs would be added to the purchase price of the building to determine the total cost of the asset for accounting purposes.