said by karlmarx:
Hmm. I have a degree in Accounting from Syracuse. A 5 year maintenance contract purchased the same time as the equipment is amortized over 5 years. In fact, in our ASSETS, we list the value remaining on the maintenance contracts. The capital is consumed over the course of the year. They are an EXPENSE when the year is up, but they are NOT an operating cost. Operating costs are the cost to maintain the network, not replacement of capital equipment.
Please reply once you get a degree in accounting.
I have to agree with you. What you wrote is basic financial accounting principles.