会计学英语电子版课件09.pptVIP

Chapter 9Reporting and Analyzing Long-Lived Assets After studying this chapter, you should be able to: Describe how the 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. Chapter 9Reporting and Analyzing Long-Lived Assets 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 on the balance sheet. Cost of Plant Assets Plant assets are resources that have physical substance are used in the operations of a business are not intended for sale to customers deliver service potential over their useful lives (except land) Plant assets are recorded at cost cost consists of all expenditures necessary to acquire the asset and make it ready for its intended use Types of Expenditures Revenue Expenditure - immediately charged against revenue as an expense Plant Assets Cost is measured by the cash paid in a cash transaction, or the cash equivalent price paid when noncash assets are used in payment. The cash equivalent price is equal to the fair market value of the asset given up, or the fair market value of the asset received, whichever is more clearly determinable. Plant AssetsLand Cost of land includes Cash price, closing costs, brokers’ commissions, accrued property taxes, etc. Can also include costs to raze a building, drain and fill the land Proceeds from sale of salvaged materials are deducted from the cost Cost of Land Improvements All expenditures necessary to make the improvements ready for their intended use Drive ways Parking lots Fences Underground sprinklers Buildings All necessary expenditures relating to the purchase or construction of a building. When a building is purchased