Chapter08 - Key Terms Chapter 8 Reporting and Interpreting...

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

View Full Document Right Arrow Icon
1 Chapter 8 Reporting and Interpreting Long-lived Assets Acct 2301 Zining Li 1 Key Terms • Tangible and Intangible Assets • Book value of long-lived assets – Acquisition cost – Accumulated depreciation • Depreciation, Amortization, and Depletion • Disposal of long-term assets 2 Long-lived Assets • Assets that will be used for operations for more than one year • Also called long-term assets, or noncurrent assets • Tangible and Intangible assets 3 Tangible Assets • Fixed Assets – Land • Natural Resources – Mineral deposits – Oil wells – Timber tracts 4 Intangible Assets • Assets lack physical substance and confer specific rights on the owner • Examples – Goodwill (purchased) – Trademark (purchased) – Copyright – Patent –F ranch ise – License and operating rights 5 How to account for purchases of long-lived assets • Assets are recorded at acquisition cost on the balance sheet (historical cost principle)
Background image of page 1

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

View Full DocumentRight Arrow Icon
2 6 Book value of long-lived assets • Acquisition cost less the Accumulated Deprecation • Also called net book value, or carrying amount of long-lived assets 7 How is Property, Plant and Equipment reported on the Balance Sheet? $10,000 Less: Accumulated depreciation 4,500 $5,500 Acquisition cost Book value Total cumulative depreciation charges to date 8 How to account for Repairs, Maintenance, and Additions • Ordinary repairs and maintenance – Revenue expenditure – Recorded as expense in the income statement • Additions and improvement – Capital expenditure – Increase the book value of assets on the balance sheet. Either increase the cost of the asset, or decrease the accumulated depreciation against the asset 9 How to account for using long-lived
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/10/2012 for the course ACCT 2301 taught by Professor Li during the Fall '09 term at University of Central Florida.

Page1 / 5

Chapter08 - Key Terms Chapter 8 Reporting and Interpreting...

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