Correct you are correct this transaction results in a

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Correct!You are correct! This transaction results in a reduction of the PP&E accountof the initial, gross value of the equipment (credit of $300,000) offset bythe receipt of cash (debit of $50,000), and the reduction of accumulateddepreciation (debit of $240,000), and loss on the disposal of the asset(debit of $10,000).
Record this transaction:On July 1, 2015, two years after the original purchase, Diamond Decals sold a building and therelated land to another party. The building and land were originally purchased for $1,500,000,and $100,000 of depreciation had been recognized against the building. Diamond Decalsreceived $1,100,000 from the purchaser of the land and building.How would the sale of theland and building be recorded?The value of the land had remained constant at $300,000 anddepreciation on the building had been recorded through June 30.Incorrect.This transaction results in a reduction of the Land and Building account ofthe initial,gross value of the land and building (credit of $1,500,000)offset by receipt ofcash (debit of $1,100,000),reduction of accumulateddepreciation (debit of $100,000), and recognition ofthe loss on thedisposal of the asset (debit of $300,000). Remember that accumulateddepreciation is a contra-asset account associated with the related assetaccount. Whenever a company disposes of an asset, the value of thatasset account as well as the related contra-asset account must both beremoved from the books. The difference between the asset account andthe contra-asset account is known as the net book value. Whenever thenet book value is greater than the amount of cash received from the saleof the asset, a loss is recognized. When the net book value is less than theamount of cash received from the sale of the asset, a gain is recognized.
US GAAP vs. IFRSNote that it is possible for an asset’s value to increase after a loss on impairment hasbeen recognized if the factors leading to impairment no longer exist. US GAAP and IFRSdiffer in how these subsequent value increases are treated. Generally, US GAAP doesnot allow the value to be written back up once it has been impaired. There is no upwardrevaluation under US GAAP. In contrast, IFRS standards generally will allow therevaluation of certain assets, up to the asset’s original cost adjusted for depreciation.4.3.4 Intangibles and AmortizationLong-Lived Non-Physical AssetsAnother class of long-lived assets is known as intangible assets. These are non-physicalassets that provide some benefit to a business over a long period of time. Typicalexamples of intangible assets include patents, trademarks, and copyrights. While thesearen’t physical assets, we recognize the expense associated with many of them in thesame way.When an intangible asset is acquired, it is recorded on the balance sheet as an asset. Itwill then be converted into an expense over time using amortization. The result is thatthe expense is recognized in the period in which it provided benefit to the business.

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