What is the different between expenditures for repair are 'expenses' and expenditures for improvement are 'capitalized'?

What is the different between expenditures for repair are 'expenses' and expenditures for improvement are 'capitalized'?
Repairs only restore an asset to the value it previously had, while improvements increase the value of an asset. If the air conditioning unit in a house broke, its value would drop; once repaired, it would be restored to the same value as it had before it broke. But if an entirely new AC system was installed in a house that never had one (an improvement), it would increase the value of the home beyond its original value.