Definition of extraordinary repairs

work that extends the life of a fixed asset more than one year and that is capitalized rather than expensed. An example is a new motor for a truck. Extraordinary repairs are charged to the accumulated depreciation account, thus increasing the book value of the asset. The asset is then depreciated over the new life. Assume on 1/1/2004 a truck costing $20,000 with a 10-year life is purchased.The book value on 12/31/2007 is $12,000 ($20,000 - $8000). On 1/1/2008, an extraordinary repair of $6000 is made. The entry is to debit accumulated depreciation and credit cash for $6000. The new book value on 1/1/2008 is thus $18,000 ($20,000 - $2000). As a result of the expenditure, the newremaining life is 8 years rather than 6 years. The depreciation expense each year starting in 2008 is $2250 ($18,000/8 years).