Final answer:
Three characteristics of extraordinary repairs/betterments are enhancement of asset value, extension of useful life, and the need for capitalization. These practices support a shift towards sustainable consumption and reduce disposability in the economy.
Step-by-step explanation:
Characteristics of Extraordinary Repairs/Betterments
Extraordinary repairs, also known as betterments, are investments in assets that extend their useful life or improve their functionality beyond the original specifications. Here are three characteristics of such repairs:
- Enhancement of Asset Value: Extraordinary repairs lead to a significant increase in the asset's value, as they significantly improve the asset's capabilities or extend its useful life.
- Extension of Useful Life: These repairs are not routine maintenance but substantial improvements that extend the useful life of an asset beyond what was initially anticipated.
- Capitalization: Unlike regular maintenance, the costs of extraordinary repairs need to be capitalized. This means that their cost is added to the asset's book value and depreciated over the extended life of the asset.
Considering the economic implications, such repairs may stimulate a shift to a more sustainable, durable goods economy with higher emphasis on craftsmanship, sustainable manufacturing, and quality. This transition can lead to the diminishing of a disposable economy, encouraging companies and consumers to invest in goods designed for longevity. It realigns consumption patterns towards environmentally-conscious choices, in lieu of planned obsolescence.