KIC000079 - depreciation or amortization r~<)~)i>...

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r '. Capital Expenditures: expenditures that are added to the acquisition cost of an asset A \.It:llVe. I Revenue Expenditures: expenditures that are expensed ~ aenera, .r?::fXUV') ~ ffi'li"',J.-", nDOl'f>_ as incurred -F-0 ~ ~ ~ :t L.O.J:IM .""", 1M Oiop. ~ CHAPTER 9 Reporting and interpreting Long-Lived Tangible and Intangible Assets '\<:<'2!4 ">4. Operational AssetS)\!;. )-assets owned by a business and used in its operations »rangible assets W f t '"property * plant * equipment );-intangible assets * trademarks * copyrights :I< patents '" licensing rights '" franchises *goodwill -)f Acquisition Cost ~ J:I: )-Purchase price , s-Taxes paid at time of purchase ~»Traosportarton charges »tnstattatron costs )- Setup costs to prepare for use
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~foperational [email protected] J> Depreciation W,; E:. 's-Amortizarion 1n~\b\-i PI-s.<;.d;,s Note: LAND is not depreciated EBITDA: Earnings before interest, taxes, depreciation and amortization Book ValueandAsset Tmpainnent I l{u: »Book Value ~ Acquisition cost - Accumulated
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Unformatted text preview: depreciation or amortization r~·<:\.)~) )i> Asset impairment occurs when the estimated future cash flows fall below book value. Ae<tl!4 aod 11W!nrb 70.1:00 ..J?"'( ~""-'-"-Cost-RV.". BV BV\ ~(~ • • •--------Depreciation Example s-Mechlne purchased for $100,000 * Estimated life: 10 years * Estimated production: 100,000 units * Estimated residual ~~lle: $ t 0,000 / 9:><'l>. .\~~ \"'-'-. . ~ tlctO /,JY lJY\.,-\},-:: q~ICO,t(b::$.9 A<<:t2l!4 It Disposal of Assets ~ »Gain or Loss on Disposal: Gain/Loss = Sales Price- BV at date of sale tic>. .C" :;. W><;.S L. "0 "'" t, ;:: * Be sure to depreciate asset up to the date of sale ,\",,,zg. Ratio Analysis ;..Fixed asset turnover ratio: FATO~---;-----;;---;----Sales A vg. net fixed a ssets 1" ?,S *t A«,211O C!'oop 9 Sc. .lts r,n tt· /$ {'a$h j'nxftch on-the. tJ'JJ o:wbi::f\...
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