intermediate accounting Investments in Noncurrent Operating Assets u Acquisition参考.ppt

Investments in Noncurrent Operating Assets—Acquisition What Costs Are Included in Acquisition Cost? Initially record noncurrent operating assets at cost. Cost includes all expenditures required to obtain asset and place it in use. Most costs associated with internally-generated intangible assets are expensed. The cost of externally purchased intangibles is generally recorded as an asset. Tangible Assets—Land Costs assigned to land should be those costs that directly relate to the land’s unlimited life. Purchase price, commissions, legal fees, escrow fees, surveying fees, and government assessments for water lines, sewers, and roads are charged to Land. Clearing and grading costs, including the removal of unwanted structures, are also part of the cost of land. Tangible Assets—Land Improvements Landscaping Paving parking lots On-property sidewalks Light structures (for parking and sidewalks) Fencing Tangible Assets—Building If the structure is purchased ready to use, charge Buildings for: Purchase price Commissions, legal fees, escrow fees, and reconditioning costs If newly constructed by an outsider: Contract price Legal fees Tangible Assets—Equipment The purchase price Taxes, freight, and insurance during shipping and installation Special foundations or reinforcing of floors Reconditioning and testing costs Intangible Assets Trademark Franchises Order Backlog Goodwill Basket Purchase Basket Purchase Deferred Payment The acquisition of real estate or other property frequently involves deferred payment of all or part of the purchase price. Land is acquired on January 2, 2011, for $100,000; $35,000 is paid at the time of purchase, and the balance is to be paid in semiannual installments of $5,000 plus interest on the unpaid principal at an annual rate of 10%. Deferred Payment Deferred Payment Deferred Payment Deferred Payment Deferred Payment Leasing A lease is a contract whereby one party (the lessee) is granted a right to use property owned by another party (the