ch11_PPT%20SlidesW

ch11_PPT%20SlidesW - Chapter 11-1 Depreciation Depreciation...

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Unformatted text preview: Chapter 11-1 Depreciation Depreciation Factors involved Factors involved Methods of Methods of depreciation depreciation Special methods Special methods Special issues Special issues Impairments Impairments Depletion Depletion Presentation and Presentation and Analysis Analysis Recognizing Recognizing impairments impairments Measuring Measuring Impairments Impairments Restoration of Restoration of loss loss Assets to be Assets to be disposed of disposed of Presentation Presentation Analysis Analysis Establishing a Establishing a base base Write-off of Write-off of resource cost resource cost Estimating Estimating reserves reserves Liquidating Liquidating dividends dividends Continuing Continuing controversy controversy Depreciation, Impairments, and Depletion Depreciation, Impairments, and Depletion Chapter 11-2 Allocating costs of long-term assets: Fixed assets = Depreciation expense Intangibles = Amortization expense Natural resources = Depletion expense Depreciation is the accounting process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset. Depreciation - Method of Cost Allocation Depreciation - Method of Cost Allocation LO 1 Explain the concept of depreciation. LO 1 Explain the concept of depreciation. Chapter 11-3 Depreciation - Method of Cost Allocation Depreciation - Method of Cost Allocation LO 2 Identify the factors involved in the depreciation process. LO 2 Identify the factors involved in the depreciation process. Three basic questions : Factors Involved in the Depreciation Process (1) What depreciable base is to be used? (2) What is the asset’s useful life? (3) What method of cost allocation is best? Chapter 11-4 Depreciation - Method of Cost Allocation Depreciation - Method of Cost Allocation LO 2 Identify the factors involved in the depreciation process. LO 2 Identify the factors involved in the depreciation process. Depreciable Base Factors Involved in the Depreciation Process Illustration 11-1 Illustration 11-1 Chapter 11-5 Depreciation - Method of Cost Allocation Depreciation - Method of Cost Allocation LO 2 Identify the factors involved in the depreciation process. LO 2 Identify the factors involved in the depreciation process. Estimation of Service Lifes Factors Involved in the Depreciation Process Service life of an asset often differs from its physical life. Companies retire assets for two reasons: physical factors (such as casualty or expiration of physical life) and economic factors (obsolescence). Chapter 11-6 Depreciation - Method of Cost Allocation Depreciation - Method of Cost Allocation LO 3 Compare activity, straight-line, and decreasing-charge methods of LO 3 Compare activity, straight-line, and decreasing-charge methods of depreciation....
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