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

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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 – Building, fixture, and equipment (PP&E) 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 – Franchise – 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) Financing charges (interest expense) are excluded from the acquisition cost
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