StudentNotesWk9_10 - THE UNIVERSITY OF NEW SOUTH WALES School of Accounting ACCT 1501 Accounting and Financial Management 1A Weeks 9 10 Accounting

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THE UNIVERSITY OF NEW SOUTH WALES School of Accounting ACCT 1501: Accounting and Financial Management 1A Weeks 9 & 10 Accounting for Non-Current Assets Student Notes Course website: http://www.elearning.unsw.edu.au/
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Table of Contents 1. Introduction to Weeks 9 & 10 Lectures 2. Learning Outcomes for Weeks 9 & 10 3. Required Readings for Weeks 9 & 10 4. Tutorial questions – Week 10 4.1 Preparation questions 4.2 Tutorial questions 5. Tutorial questions – Week 11 5.1 Preparation questions 5.2 Tutorial questions 6. Comprehensive lecture illustrations 7. Learning checklist for Weeks 9 & 10 8. Supplemental Readings – Week 10 9. Lecture Notes & worksheet week 9 – see PDF attached 10. Lecture Notes & worksheet week 10 – see PDF attached Session 1, 2009 AFM1A 2
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1. Introduction Welcome to the topic of accounting for non-current assets. Non-current assets encompass a company’s fixed assets (also called tangible assets) as well as intangibles such as goodwill, and other non-current assets such as non-current receivables, non-current investments, and deferred income tax assets. All these are examples of assets whose benefit is expected to be used up over a period longer than the entity’s operating cycle or 12 months. Our focus for the next two weeks will be on two types of non-current assets, namely ‘property, plant and equipment’ and ‘intangible assets’. In the first week we will concentrate on how to account for the acquisition of these assets and then how to account for the consumption of the benefits represented by these assets known as “ depreciation ”. Non- current assets typically lose value over time so it is necessary to look at how to account for changes in value post acquisition. In the second week we continue our discussion of non-current assets by examining the impact of selling and disposing of non-current assets. We then consider measurement issues by examining how the value of non-current assets can change over time. In particular, we examine how to value non-current assets post acquisition, how to account for asset revaluations and the application of the recoverable amount test. We will briefly look at the impairment test for non-current assets also. For those students continuing on to more advanced financial accounting courses, it is highly advisable that you gain a solid understanding of all these concepts. 2. Learning Outcomes At the end of this topic, you should be able to: Define an asset Distinguish between current and non-current assets Account for the acquisition of an asset Distinguish between a betterment and a repair & maintenance item Distinguish between tangible and intangible assets Describe the concept and significance of depreciation Calculate the amount of depreciation using different depreciation methods Explain how the different methods of depreciation have an impact on profit and the income statement Understand how depreciation is recorded and disclosed Account for sales of non-current assets
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This note was uploaded on 01/22/2011 for the course ACCT 1501 taught by Professor Helen during the Three '09 term at University of New South Wales.

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StudentNotesWk9_10 - THE UNIVERSITY OF NEW SOUTH WALES School of Accounting ACCT 1501 Accounting and Financial Management 1A Weeks 9 10 Accounting

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