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17 download_doc-14.php - A311 Expense recognition on...

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Unformatted text preview: A311 (4/14/2009) Expense recognition on capital assets * * assets used in producing goods & services (e.g., plant, equipment, and most intangible assets). Consider how capital assets (“Prop”) change overtime: HEP HEP Prop t = Prop t-1 + Prop Acquired t – Prop Disposed t-AD t = -AD t-1 + AD on Disposed Prop t – Dep Exp t ________________________________________________________ER Principle Prop t Net = Prop t-1 Net + Prop Acquired t – Prop Disposed t Net – Dep Exp t An Identity… Prop t Net ≡ Prop t-1 Net + Prop Acquired – Prop Disposed t Net – Dep Exp t – Prop Impairment Loss t * HEP HEP/ER ER Specific acct standards provide guidance on measurement when it is likely capital assets have been “impaired” (i.e., their economic value has been diminished by some non-exchange event); such measurement is usually based on present value methods. Depreciation Expense ...Acct standards require depreciation of capital assets to be based on “systematic” and “rational” allocation of HEP to expense “over estimated useful life of the...
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This note was uploaded on 04/18/2011 for the course BUS 311 taught by Professor Palmer during the Winter '11 term at Indiana.

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17 download_doc-14.php - A311 Expense recognition on...

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