Kieso_Inter_13e_Ch11

Kieso_Inter_13e_Ch11 - Chapter 11-1 C H A P T E R C H A P T...

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Unformatted text preview: Chapter 11-1 C H A P T E R C H A P T E R 11 11 DEPRECIATION, IMPAIRMENTS, DEPRECIATION, IMPAIRMENTS, AND DEPLETION AND DEPLETION Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield 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. depreciation. The profession requires the method employed be “systematic and rational.” Examples include: Methods of Depreciation (1) Activity method (units of use or production). (2) Straight-line method. (3) Sum-of-the-years’-digits. (4) Declining-balance method. (5) Group and composite methods. (6) Hybrid or combination methods. Accelerated methods Accelerated methods Special methods Special methods Chapter 11-7 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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This note was uploaded on 03/08/2011 for the course ACCT 3220 taught by Professor Hollie,dana during the Summer '08 term at Colorado.

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Kieso_Inter_13e_Ch11 - Chapter 11-1 C H A P T E R C H A P T...

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