Answer:
Capitalizing revenue-based expenses as depreciable assets will cause income to be higher in the current period and lower in future periods
Explanation:
By capitalizing the revenue-based expenses means a part of it is released into profit or loss for the current period,hence lower costs,higher profits.
In future periods that none of the revenue-based expenses should be charged to, is been charged with such expenses,as a result more expenses in future periods,lower profits overall.
This approach is distorting as it would show expenses in an unrelated period,hence cut-off procedure is not been observed.
