tailieunhanh - Lecture Accounting principles – Chapter 9: Long-lived assets

In this chapter students will be able to: Determine the cost of property, plant and equipment; explain and calculate depreciation; explain the factors that cause changes in periodic depreciation and calculate revisions;. | Long-Lived Assets Property, Plant and Equipment Determining cost and depreciation Revising depreciation Disposals Natural Resources Cost, depreciation and disposal Intangible Assets Accounting for intangible assets Assets with finite and indefinite lives Goodwill Statement Presentation and Analysis Copyright John Wiley & Sons Canada, Ltd. 2 CHAPTER 9: Long-Lived Assets Determine the cost of property, plant and equipment. Explain and calculate depreciation. Explain the factors that cause changes in periodic depreciation and calculate revisions. Account for the disposal of property, plant and equipment. Calculate and record depreciation of natural resources. Identify the basic accounting issues for intangible assets and goodwill. Illustrate the reporting and analysis of long-lived assets. Copyright John Wiley & Sons Canada, Ltd. 3 Property, Plant and Equipment Long-lived assets owned by a company Used in production & sale of goods & services Characteristics: Have physical substance (size and shape) Used in the operations of the business Not intended for sale to customers Expected to provide services for a number of years Divided into four classes: Land, land improvements, buildings, equipment Copyright John Wiley & Sons Canada, Ltd. 4 Determining Cost Cost includes: Purchase price, non-refundable taxes, less discounts and rebates All costs necessary to bring asset to location and make it ready for use Obligations to remove, restore asset when it is retired (asset retirement costs) These costs are capital expenditures Benefit future periods Costs that benefit only the current period are called operating expenditures Copyright John Wiley & Sons Canada, Ltd. 5 Land and Improvements Cost of land includes: Purchase price Closing costs such as legal fees and surveys Costs of preparing land for intended use Land improvements: Structural additions to land such as fences, parking lots, landscaping Have limited useful lives Recorded separately and depreciated Copyright John . | Long-Lived Assets Property, Plant and Equipment Determining cost and depreciation Revising depreciation Disposals Natural Resources Cost, depreciation and disposal Intangible Assets Accounting for intangible assets Assets with finite and indefinite lives Goodwill Statement Presentation and Analysis Copyright John Wiley & Sons Canada, Ltd. 2 CHAPTER 9: Long-Lived Assets Determine the cost of property, plant and equipment. Explain and calculate depreciation. Explain the factors that cause changes in periodic depreciation and calculate revisions. Account for the disposal of property, plant and equipment. Calculate and record depreciation of natural resources. Identify the basic accounting issues for intangible assets and goodwill. Illustrate the reporting and analysis of long-lived assets. Copyright John Wiley & Sons Canada, Ltd. 3 Property, Plant and Equipment Long-lived assets owned by a company Used in production & sale of goods & services Characteristics: Have physical substance .