Ch 8 PPand E - ii. Calculate Loss amount and write down...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Ch 8 Reporting and Interpreting Property, Plant, and Equipment; Natural Resources and Intangibles 1. Classifying Long-Lived Assets a. Tangible Assets i. Land ii. Buildings, Fixtures and Equipment iii. Natural Resources b. Intangible Assets i. Patents, Copyrights, Franchises, Licenses and Trademarks 2. Measuring and Recording Acquisition Cost. a. Cost Principle : include all costs reasonable and necessary to acquire asset and prepare it for use. b. How Assets are Acquired: i. Cash ii. Debt iii. Equity (or other Non-cash consideration) iv. Construction 3. Costs Subsequent to Acquisition a. Repairs, Maintenance and Additions (See supplemental Reading in Blackboard) i. Revenue Expenditures ii. Capital Expenditures 4. Use, Impairment and Disposal of Plant and Equipment a. Assets in Use are subject to Depreciation i. Depreciation ii. Matching Principle iii. Adjusting entry iv. Depreciation Methods 1. Straight Line 2. Units of Production 3. Declining Balance 1
Background image of page 1

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

View Full DocumentRight Arrow Icon
b. Measuring Asset Impairment (2 Step Process) i. Has Impairment Occurred? 1. Net Book value > Estimated Future Cash Flows
Background image of page 2
Background image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ii. Calculate Loss amount and write down asset to fair value 1. Net Book value Fair Value c. Disposal of Property, Plant and Equipment i. Update depreciation expense and Accumulated Depreciation ii. Record disposal of asset 5. How Managers Choose a. Financial Reporting b. Tax Reporting i. Modified Accelerated Cost Recovery System (MACRS) 6. Natural Resources a. Acquisition b. Periodic Depletion 7. Intangible Assets a. Acquisition b. Definite Life Intangibles are subject to amortization c. Indefinite Life Intangibles: are NOT Amortized d. Typical Intangible Assets i. Goodwill ii. Trademarks iii. Copyrights iv. Patents v. Technology vi. Franchises vii. Licenses and Operating Rights 8. Property Plant and Equipment and the Financial Statements a. Balance sheet b. Income Statement c. Statement of Cash flows NOTE: Research and Development Expense is NOT an Intangible Assets under US GAAP 9. Supplement A: Change in Estimates (Page 428) 2 3...
View Full Document

Page1 / 3

Ch 8 PPand E - ii. Calculate Loss amount and write down...

This preview shows document pages 1 - 3. Sign up to view the full document.

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