Chapter 7 - Chapter 7 -Generally requires a determinable...

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Chapter 7 -Generally requires a determinable useful life. -Organizational costs can be expensed up to 5,000 and the balance is amortizable using the straight-line method over 180 months. -Start-up costs can be expensed up to 5,000 and the balance is amortizable using the straight-line method over 180 months- some exceptions. -Purchased goodwill -Historically, no amortization of goodwill because it was deemed to be a nonwasting asset. -Since 1993, amortize over 15 years -Purchased “other intangibles” -1993 change to 15-year amortization ended battles over what was “useful life” of the asset. Bonus depreciation: another expensing provision that said when you buy personal property and certain lease hold improvements, after 9/11/2001 through May 5, 2003, you can write off 30% and depreciate the rest. (Similar to 179) -Does not apply to buildings -Bought a 100,000 computer, you get a 30,000 write-off at the top and now depreciate the 70,000 to be depreciated. -Used to keep people buying -May 6, 2003 through 12/31/2004 it went to 50% My Notes Deductible expense or capitalized cost -Capitalized: if the expenditure enhances or creates an identifiable asset with a useful life substantially beyond the current year then it must be capitalized. Example: raises 1,000,000 and has 40,000 in expenses (35%) compare after-tax cash
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This note was uploaded on 04/02/2008 for the course ACCT 4440 taught by Professor Stec-helsta during the Fall '07 term at Colorado.

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Chapter 7 - Chapter 7 -Generally requires a determinable...

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