Betterment

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DEFINITION of 'Betterment'

A type of action or cost expenditure that contributes towards improving an asset's performance and/or increasing its value. Betterments do not include general maintenance-related actions that seek to sustain an asset's current value.

INVESTOPEDIA EXPLAINS 'Betterment'

For example, fixing a garage door would not be betterment, but adding an automatic garage-door opener to the garage would be, because the new door will add value to the home.

An example of betterment in business would be replacing an outdated piece of equipment with a new piece that increases a manufacturing facility's production capacity. In this case, the overall asset's value (the manufacturing facility) is greater than its value would have been had it kept the old equipment.

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