ACCT 305 Live Lecture Week 3

ACCT 305 Live Lecture Week 3 - ACCT 305 Live Lecture Week 3...

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ACCT 305 Live Lecture Week 3 Monique Smalling, CPA
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Agenda Week 3 TCOs Overview of Chapter 11: Operational Assets: Utilization and Impairment Chapter 11 homework examples Revisit TCOs
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Week 3 TCO TCO 4: Given data related to plant assets such as capitalized cost and economic life, analyze the impact on financial statements of various depreciation methods, lives, and conventions. Explain the concept of cost allocation (depreciation, amortization, and depletion) as it applies to operational assets. Determine periodic depreciation for property, plant and equipment (fixed assets) using both time-based and activity-based methods. Explain the appropriate accounting treatment required when a change is made in the service life or residual value of an operational asset. Explain the appropriate accounting treatment required when a change in depreciation, amortization, or depletion method is made. Identify situations that involve a significant impairment of the value of operational assets and describe the required accounting procedures. Distinguish between costs that should be capitalized as part of operational assets and those that are expensed, such as repairs and maintenance.
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Cost Allocation Operational assets are recorded on balance sheet and their cost is allocated over their service life 3 factors for cost allocation: 1. Service life 2. Allocation base: Cost – salvage value 3. Allocation method
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Types of Cost Allocation Depreciation Operational assets Amortization Intangible assets Depletion Natural resources
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Depreciation Methods Time-based Methods Straight-line
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This note was uploaded on 02/05/2012 for the course ACCT 305 taught by Professor Charlie during the Spring '11 term at University of Phoenix.

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ACCT 305 Live Lecture Week 3 - ACCT 305 Live Lecture Week 3...

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