tailieunhanh - Lecture Fundamental financial accounting concepts (8/e): Chapter 8 - Edmonds, McNair, Olds
Chapter 8 - Accounting for long-term operational assets. After you have mastered the material in this chapter, you will be able to: Identify different types of long-term operational assets, determine the cost of long-term operational assets, explain how different depreciation methods affect financial statements, determine how gains and losses on disposals of long-term operational assets affect financial statements,. | Accounting for Long-Term Operational Assets Chapter Eight McGraw-Hill/Irwin McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. This chapter explains accounting for long-term operational assets from the date of purchase through the date of disposal. 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. 8- We can distinguish between tangible and intangible assets by our ability to see and feel tangible assets. Intangible assets normally represent rights or privileges and are very difficult to evaluate. Tangible Long-Term Assets Property, Plant, and Equipment – Sometimes called plant assets or fixed assets. We depreciate these assets over their useful life. 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. Land – Has an infinite life and is not subject to depreciation. 8- Part I Property, plant, and equipment is sometimes called fixed assets or plant assets. Once we acquire a fixed asset we depreciate its cost over its estimated useful life. Depreciation is a systematic and rational method of allocating the cost of an asset over the periods benefited by the use of the asset. Depreciation is a cost allocation scheme and has nothing to do with market value of the asset. Part II Natural resources are usable assets provided by nature. Examples include oil and gas and coal deposits. The process of allocating cost of a natural resource is called depletion. The concept is very similar to depreciation, but refers to the treatment of natural resources. Part III Land is a productive asset but it has an infinite life and is not subject to depreciation. Intangible Assets Intangible Assets with Identifiable Useful Lives – patents and copyrights. . | Accounting for Long-Term Operational Assets Chapter Eight McGraw-Hill/Irwin McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. This chapter explains accounting for long-term operational assets from the date of purchase through the date of disposal. 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. 8- We can distinguish between tangible and intangible assets by our ability to see and feel tangible assets. Intangible assets normally represent rights or privileges and are very difficult to evaluate. Tangible Long-Term Assets Property, Plant, and Equipment – Sometimes called plant assets or fixed assets. We depreciate these assets over their useful life. Natural Resources – Mineral deposits, oil and gas reserves, timber stands, coal mines, and stone quarries are some examples of natural resources. We .
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