Accg105 Lecture week 9 2009S3 NCA

Accg105 Lecture week 9 2009S3 NCA - Lecture Week 9 Accg105...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
Lecture Week 9 Accg105 Introductory Financial Accounting
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Topics to cover this week: Classification of assets Cost of acquisition Concept of depreciation Methods for calculating periodic depreciation expense Disposal of a non-current asset Underlying assumptions and principles
Background image of page 2
Classification of assets
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Property, Plant & Equipment P,P&E are non-current physical assets acquired by the business for use in the operations of the business , rather than for resale to customers. These assets are used by the entity to provide economic benefits over more than one accounting period.
Background image of page 4
Property, Plant & Equipment Examples include: Land Buildings Machinery Motor Vehicles Equipment
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Non-current assets should initially be recorded at the ‘cost of acquisition’ . Cost of acquisition = purchase consideration  at time of acquisition  plus directly attributable  costs incurred in acquiring the assets
Background image of page 6
Purchase consideration = fair value of what is given up to acquire the asset (i.e. cash paid, capital issued and/or liabilities undertaken)
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Directly Attributable Costs : any costs incurred in getting the asset to a location and condition ready for its intended use. Examples include: Delivery costs, insurance while in transit, installation and assembly costs, costs of testing whether the asset works. NOTE: GST is NOT included in the cost, because it is recoverable.
Background image of page 8
Costs that are not necessary or do not increase the future economic benefits of the asset should be excluded from the acquisition cost. For example, the cost of repairs to an asset that was damaged due to carelessness when installing should be expensed not included in the cost of acquisition of the asset.
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Cost of Acquisition - Example A new machine is purchased on 1 Sept for $60,000 cash. $2,000 is paid for delivery, $1,000 for installation and $500 for stamp duty. Cost of
Background image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/20/2010 for the course ACCOUTING 22 taught by Professor Mark during the Spring '10 term at SCA NC.

Page1 / 34

Accg105 Lecture week 9 2009S3 NCA - Lecture Week 9 Accg105...

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online