Chapter 8 Spark

Chapter 8 Spark - Chapter 8 Accounting for Long-Term...

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Unformatted text preview: Chapter 8 Accounting for Long-Term operational Assets Land Buildings Equipment, etc. How do you expense the above? What does capitalize mean? How does matching happen? Tangible versus Intangible Assets Tangible assets have a physical presence; they can be seen and touched. Intangible assets are rights or privileges. They cannot be seen or touched. Tangible Long-Term Assets 1. 1. Property, Plant, and Equipment Property, Plant, and Equipment Sometimes called plant assets or fixed assets. We depreciate these assets over their useful life. 2. 2. Natural Resources Natural Resources Mineral deposits, oil and gas reserves, timber stands, coal mines, and stone quarries are some examples of natural resources. We deplete these assets over their useful life. 3. 3. Land Land Has an infinite life and is not subject to depreciation. Intangible Assets 1. 1. Intangible Assets with Identifiable Useful Lives Intangible Assets with Identifiable Useful Lives These intangibles include patents and copyrights. We amortize the cost of each over its useful life. 2. 2. Intangible Assets with Indefinite Useful Lives Intangible Assets with Indefinite Useful Lives - These intangibles include renewable franchises, trademarks, and goodwill. The cost of these assets is not expensed unless it can be shown that there has been an impairment in value. Cost of Long-Term Assets Buildings Buildings Purchase price, Purchase price, Sales taxes, Sales taxes, Title search and transfer document costs, Title search and transfer document costs, Realtors and attorneys fees, and Realtors and attorneys fees, and Remodeling costs....
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Chapter 8 Spark - Chapter 8 Accounting for Long-Term...

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