tailieunhanh - Lecture Accounting: Tools for business decision making (5th edition): Chapter 9 - Kimmel, Weygandt, Kieso

Chapter 9 - Reporting and analyzing long-lived assets. After studying this chapter, you should be able to: Explain the accounting for plant asset expenditures, apply depreciation methods to plant assets, explain how to account for the disposal of plant assets. | REPORTING AND ANALYZING LONG-LIVED ASSETS Accounting, Fifth Edition 9 After studying this chapter, you should be able to: Describe how the historical cost principle applies to plant assets. Explain the concept of depreciation. Compute periodic depreciation using the straight-line method, and contrast its expense pattern with those of other methods. Describe the procedure for revising periodic depreciation. Explain how to account for the disposal of plant assets. Describe methods for evaluating the use of plant assets. Identify the basic issues related to reporting intangible assets. Indicate how long-lived assets are reported in the financial statements. Learning Objectives Preview of Chapter 9 Accounting Fifth Edition Kimmel Weygandt Kieso Plant Assets Referred to as property, plant, and equipment; plant and equipment; and fixed assets. LO 1 Describe how the historical cost principle applies to plant assets. physical substance (a definite size and shape), are used in the operations of a business, are not intended for sale to customers, are expected to provide service to the company for a number of years, except for land. Plant assets are resources that have Plant assets are critical to a company’s success Plant Assets Illustration 9-1 LO 1 Describe how the historical cost principle applies to plant assets. Historical Cost Principle - requires that companies record plant assets at cost. Cost consists of all expenditures necessary to acquire an asset and make it ready for its intended use. Determining the Cost of Plant Assets Revenue expenditure – costs incurred to acquire a plant asset that are expensed immediately. Capital expenditures - costs included in a plant asset account. LO 1 Describe how the historical cost principle applies to plant assets. Determining the Cost of Plant Assets Cost - cash paid in a cash transaction or the cash equivalent price paid. Cash equivalent price is the fair value of the asset given up or fair value of the asset received, . | REPORTING AND ANALYZING LONG-LIVED ASSETS Accounting, Fifth Edition 9 After studying this chapter, you should be able to: Describe how the historical cost principle applies to plant assets. Explain the concept of depreciation. Compute periodic depreciation using the straight-line method, and contrast its expense pattern with those of other methods. Describe the procedure for revising periodic depreciation. Explain how to account for the disposal of plant assets. Describe methods for evaluating the use of plant assets. Identify the basic issues related to reporting intangible assets. Indicate how long-lived assets are reported in the financial statements. Learning Objectives Preview of Chapter 9 Accounting Fifth Edition Kimmel Weygandt Kieso Plant Assets Referred to as property, plant, and equipment; plant and equipment; and fixed assets. LO 1 Describe how the historical cost principle applies to plant assets. physical substance (a definite size and shape), are used in the operations .