Expenditures subsequent to acquisition may be properly capitalized when they increase the asset's useful life or increase its productive capacity. However, most companies set thresholds for capitalizing these expenditures based on:

Materiality

Explanation:

Materiality is a concept in accounting which states that none serious information can be ignored.

Any information that has no significant effect on the business must not be included. a business should include only those significant information in its financial statements. Significance is gotten from the the users of the financial statements. If an information is significant enough to change the a users view about the company, then the information should be available in the financial statements. If the information is not significant, it should not be in the financial statements.

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