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Unformatted text preview: Intermediate Accounting eBook 6/e Content Chapter10: Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition Chapter Opener / / / OVERVIEW This chapter and the one that follows address the measurement and reporting issues involving property, plant, and equipment and intangible assets, the tangible and intangible long-lived assets that are used in the production of goods and services. This chapter covers the valuation at date of acquisition and the disposition of these assets. In Chapter 11 we discuss the allocation of the cost of property, plant, and equipment and intangible assets to the periods benefited by their use, the treatment of expenditures made over the life of these assets to maintain and improve them, and impairment. / / / LEARNING OBJECTIVES After studying this chapter, you should be able to: LO1 Identify the various costs included in the initial cost of property, plant, and equipment, natural resources, and intangible assets. ( page 504 ) LO2 Determine the initial cost of individual property, plant, and equipment and intangible assets acquired as a group for a lump-sum purchase price. ( page 512 ) LO3 Determine the initial cost of property, plant, and equipment and intangible assets acquired in exchange for a deferred payment contract. ( page 513 ) LO4 Determine the initial cost of property, plant, and equipment and intangible assets acquired in exchange for equity securities or through donation. ( page 515 ) LO5 Calculate the fixed-asset turnover ratio used by analysts to measure how effectively managers use property, plant, and equipment. ( page 516 ) LO6 Explain how to account for dispositions and exchanges for other nonmonetary assets. ( page 517 ) LO7 Identify the items included in the cost of a self-constructed asset and determine the amount of capitalized interest. ( page 521 ) LO8 Explain the difference in the accounting treatment of costs incurred to purchase intangible assets versus the costs incurred to internally develop intangible assets. ( page 526 ) LO9 Discuss the primary differences between U.S. GAAP and IFRS with respect to the acquisition and disposition of property, plant, and equipment and intangible assets. ( page 532 ) FINANCIAL REPORTING CASE Page 1 of 3 Chapter Opener 1/22/2011 http://highered.mcgraw-hill.com/sites/0077328787/student_view0/ebook/chapter10/chapte... A Disney Adventure Now I'm really confused, confessed Stan, your study partner, staring blankly at the Walt Disney Company balance sheet that your professor handed out last week. I thought that interest is always expensed in the income statement. Now I see that Disney is capitalizing interest. I'm not even sure what capitalize means! And what about this other account called goodwill? What's that all about? If you hadn't missed class today, we wouldn't be having this conversation. Let's take a look at the Disney financial statements and the disclosure note on capitalized interest and I'll try to explain it all to you.disclosure note on capitalized interest and I'll try to explain it all to you....
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- Spring '12
- Intangible Assets