Question

Intangible drilling and development costs can be either charged off as an expense in the year in which they are incurred or capitalized and written off through depletion.

True or False

Answer 1

Intangible drilling and development costs can be either charged off as an expense or capitalized and written off through depletion. It is important to consider factors such as the duration of the project and the expected output when deciding how to account for these costs.

Step-by-step explanation:

Intangible drilling and development costs can be either charged off as an expense in the year they are incurred or capitalized and written off through depletion. This means that the costs can either be immediately deducted as an expense or spread out over time through the depletion of the resources being drilled or developed. It is important to consider factors such as the duration of the project and the expected output when deciding how to account for these costs.

drilling and development costs can be either charged off as an expense or capitalized and written off through depletion. It is important to consider factors such as the duration of the project and the expected output when deciding how to account for these costs.