ACC 302 PPt 13

ACC 302 PPt 13 - 1 Investments in Noncurrent Operating...

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1 Investments in  Investments in  Noncurrent  Noncurrent  Operating Assets-- Operating Assets-- Utilization and  Utilization and  Retirement Retirement
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2 Use straight-line, accelerated, use- factor, and group depreciation methods to compute annual depreciation expense. Discuss the issues impacting proper amortization of intangible assets. Apply the productive-output method to the depletion of natural resources. Learning Objectives
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3 Incorporate changes in estimates into the computation of depreciation for current and future periods. Identify whether an asset is impaired and measure the amount of the impairment loss, using U.S. GAAP and international accounting standards. Account for the sale of depreciable assets in exchange for cash and in exchange for other depreciable assets. Learning Objectives
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4 Learning Objectives EXPANDED MATERIAL Compute depreciation for partial periods, using both straight-line and accelerated methods. Understand the depreciation methods underlying the MACRS income tax depreciation system.
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5 ACQUIRE long-term operating assets Time Line of Business Issues CHANGE estimates related to an asset’s life ESTIMATE and RECOGNIZE an asset’s use (depreciation, amortization, and depletion)
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6 Time Line of Business Issues MONITOR asset value for possible declines DISPOSE of a depreciable asset
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7 Factors Affecting the Periodic Depreciation Charge Asset cost Residual or salvage value Useful life Pattern of use
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8 Depreciation--Financial Statement Impacts Depreciation Balance Sheet C. Assets XX XXXX Acc. Dep. (XX) Total XXXX Liab. XXX OE XXX Total XXXX Income Statement Revenue XXXX COGS XXX Gr. Profit XXX Dep. Exp . (XX) Net Inc. XXX Statement of Cash Flows From Oper. Net Inc. XXX Dep. Exp. XX Net Cash XXX
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9 Depreciation--Financial Statement Impacts Depreciation Balance Sheet C. Assets XX XXXX Acc. Dep. (XX) Total XXXX Liab. XXX OE XXX Total XXXX Income Statement Revenue XXXX COGS XXX Gr. Profit XXX Dep. Exp . (XX) Net Inc. XXX Statement of Cash Flows From Oper. Net Inc. XXX Dep. Exp. XX Net Cash XXX
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10 Depreciation--Financial Statement Impacts Indirect Method Depreciation Balance Sheet C. Assets XX XXXX Acc. Dep. (XX) Total XXXX Liab. XXX OE XXX Total XXXX Income Statement Revenue XXXX COGS XXX Gr. Profit XXX Dep. Exp . (XX) Net Inc. XXX Statement of Cash Flows From Oper. Net Inc. XXX Dep. Exp. XX Net Cash XXX
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11 Depreciation Vocabulary Book Value : Historical cost of the asset less accumulated depreciation. Depreciation
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ACC 302 PPt 13 - 1 Investments in Noncurrent Operating...

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