Final answer:
Under GAAP, it is false that the cost of a long-lived asset is always capitalized; only costs that provide future economic benefits are capitalized, while others may be expensed.
Step-by-step explanation:
In accordance with US Generally Accepted Accounting Principles (GAAP), it is false that a company will always capitalize the cost of a long-lived asset. Under GAAP, the initial cost of a long-lived asset is capitalized - that is, recorded as an asset on the balance sheet rather than an expense on the income statement - if it provides future economic benefit to the company. However, there are exceptions, and certain expenditures related to long-lived assets may be expensed, such as routine maintenance and repairs that do not extend the asset's useful life. Major improvements or upgrades that add value or extend the asset's life are typically capitalized.
For example, if the asset has a useful life of less than one year or if the cost is below a certain threshold, it may be expensed rather than capitalized.