Home  Journals  International Accounting  11(533) - 2025 November

The dilemma of including costs in the cost of assets or recognizing them as expenses in financial accounting

Received: 17 October 2025

Accepted: 30 October 2025

Available online: 18 November 2025

Subject Heading: FINANCIAL ACCOUNTING

JEL Classification: M41

Pages: 19-39

https://doi.org/10.24891/htcjsh

Subject. This article discusses areas of concern related to the recognition of costs in financial accounting, either as part of the cost of assets or as expenses.
Objectives. The article aims to identify the prospects for addressing areas of concern of recognizing costs in the cost of assets or as part of expenses.
Methods. For the study, I used critical analysis, synthesis, comparison, observation, and the analogy method.
Results. The article identifies a large number of situations in which there is a dilemma between recognizing costs in the cost of assets or as expenses, as well as the reasons for including or not including costs in the cost of assets under Russian Accounting Standards and International Financial Reporting Standards. The article justifies the areas of concern of the dilemma of recognizing costs in the cost of assets or as part of expenses and suggests possible ways to address these issues.
Conclusions and Relevance. The decision on whether to include costs in the cost of assets or recognize them as expenses plays a crucial role in the formation of reporting information on an organization's assets and equity. The comparison of the approaches in the systems of Russian Accounting Standards and International Financial Reporting Standards shows a great similarity between these standards regarding the resolution of the dilemma of recognizing costs in the cost of assets or as expenses, while also highlighting some differences between them. In most cases, the resolution of the specified dilemma in RAS and IFRS systems is logical, although in certain cases there are controversial points. The results obtained have both practical and theoretical applications in the field of financial accounting.

Keywords: costs, expenses, cost of assets

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