Final answer:
The statement is true, repairs that extend the life of equipment must be capitalized. This accounting practice encourages sustainability by promoting durability and repairability, aligning with the shift away from a disposable economy.
Step-by-step explanation:
The statement that a repair must be capitalized if it extends the life of equipment, rather than treated as an expense, is True. In accounting, capitalization involves adding the cost of a major repair to the asset's book value because it effectively extends the useful life, or improves the value, of the asset. This is different from an expense, which is recorded on the income statement and affects the current period's net income. Repairs that maintain the asset in its current condition are typically expensed as they occur.
Within the broader context of sustainability and economics, this accounting rule can help shift the perspective towards valuing durability and craftsmanship. It aligns with the principle of reducing waste and encourages the use of high-quality goods and components that are designed for a long life and easy upgrade or repair. This approach supports a move away from a disposable economy and towards one that values longer-lasting, repairable products.