In measuring accrued physical depreciation, what do curable and incurable signify?

• A. Curable is physical damage that the owner would anticipate correcting immediately; Incurable is not economically feasible to fix because of cost to cure the effect.
• B. Curable means cosmetic issues
• C. Curable means the item is unrepairable
• D. Curable refers to tax implications

Answer: (A)

The concept being tested is whether a depreciation item is economically worth repairing. In measuring accrued physical depreciation, curable means the physical damage is repairable and the cost to cure is justified by the value regained or preserved. Incurable means the cost to cure is not economically feasible—typically the repair cost would exceed the value added or would notbe justified by the market value, so workers wouldn’t fix it in practice.

So the statement that curable is physical damage the owner would anticipate correcting immediately, and incurable is not economically feasible to fix because of the cost to cure, captures this cost‑benefit approach. For example, fixing a leaky roof when the repair cost is reasonable is curable; replacing an entire foundation when the cost far exceeds the value gained would be incurable.

Cosmetic issues are not the formal definition, and the idea of something being unrepairable or tied to tax implications misses the core point about economic feasibility of cure in depreciation.