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Chapter 9 - Chapter 9 Class Notes Reporting and...

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We only cover pp.382-396 of this chapter Accounting for Long-Lived Tangible Assets (also known as PP&E or Fixed Assets) There are three accounting issues that we must address regarding PP&E: 1. Acquisition – determining the cost of the asset and entry to record the purchase 2. Depreciation – allocating the cost of the asset over its useful life 3. Disposal – recording the disposal/sale of the asset Acquisition Cost of PP&E Includes the purchase price plus all reasonable and necessary costs incurred to get the asset in place and ready to use. Land – purchase price, commissions, legal fees, escrow fees, surveying fees, clearing and grading costs Land Improvements (landscaping, paving, fencing) – cost of improvements, including materials, labor, and overhead Building – purchase price, commissions, reconditioning costs Chapter 9 Class Notes Reporting and Interpreting Long-Lived Tangible & Long-Lived Intangible Assets Compiled by: Janice H. Fergusson, CPA Certain Materials used with permission of The McGraw-Hill Companies, Inc.
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