Final answer:
The statement regarding post-acquisition expenditures and their classification as either expenses or capital investments is true, requiring judgment to determine based on the nature and potential benefits of the expenditure.
Step-by-step explanation:
The statement that when a company has post-acquisition expenditures related to Property, Plant, and Equipment it must determine whether the amount should be expensed as an ordinary repair or capitalized as a major repair, addition, or betterment, requiring the use of judgment, is True. Companies must assess whether subsequent expenditures after their initial investment enhance the asset's value, extend its useful life, or adapt it for a new or different use, which would then be capitalized. In contrast, ordinary repairs that merely maintain the asset's current condition are typically expensed.
Investment expenditure is determined by spends on new capital goods, falling into categories such as producer's durable equipment and software, nonresidential structures like factories and offices, changes in inventories, and residential structures. These investments, essential for maintaining and inducing economic growth, involve significant analysis to ensure that the funds used will yield future profits.
Therefore, the nature of the expenditure directly impacts whether it is classified as a capital investment or as an expense. Making this determination requires careful consideration and use of business judgment.