Final answer:
The claim that costs for additions and improvements to a long-lived asset are expensed in the period incurred is false. These costs are capitalized and expensed over the asset's useful life through depreciation.
Step-by-step explanation:
The statement that additions and improvements to a long-lived asset that increase the asset's operating efficiency, productive capacity, or expected useful life are generally expensed in the period incurred is false. These costs are not treated as expenses in the period they are incurred. Instead, they are capitalized, which means they are added to the asset's book value and expensed over time through depreciation or amortization, reflecting the enhanced utility of the asset over its useful life.
Firms make decisions that involve spending money currently for future benefits. Investment strategies and financial assets are essential components in a firm's decision-making process regarding the expansion and enhancement of their productive capacity. An addition or improvement to a fixed asset, which provides future economic benefits, is reflected in the firm's long-term financial planning and asset management.