TAILIEUCHUNG - Ebook Introduction to financial accounting (2/E): Part 2
Part 2 book “Introduction to financial accounting” has contents: Debt financing - Current and non-current liabilities, equity financing, proprietorships and partnerships, financial statement analysis, the statement of cash flows, debt financing – bonds. | CHAPTER EIGHT Long-lived Assets Long-lived or capital assets are used in the normal operating activities of the business and are expected to provide benefits for a period in excess of one year. Long-lived assets covered in this chapter consist of three types: (a) property, plant, and equipment (PPE); (b) intangible assets; and (c) goodwill. Also discussed are depreciation and amortization, techniques to allocate the cost of most long-lived assets over their estimated useful lives. Chapter 8 Learning Objectives LO1 – Describe how the cost of property, plant, and equipment (PPE) is determined, and calculate PPE. LO2 – Explain, calculate, and record depreciation using the units-ofproduction, straight-line, and double-declining balance methods. LO3 – Explain, calculate, and record depreciation for partial years. LO4 – Explain, calculate, and record revised depreciation for subsequent capital expenditures. LO5 – Explain, calculate, and record the impairment of long-lived assets. LO6 – Account for the derecognition of PPE assets. LO7 – Explain and record the acquisition and amortization of intangible assets. LO8 – Explain goodwill and identify where on the balance sheet it is reported. LO9 – Describe the disclosure requirements for long-lived assets in the notes to the financial statements. CHAPTER EIGHT / Long-lived Assets 393 A. Establishing the Cost of Property, Plant, and Equipment (PPE) LO1 - Describe how the cost of property, plant, and equipment (PPE) is determined, and calculate PPE. Property, plant, and equipment (PPE) are long-lived assets that are acquired for the purpose of generating revenue either directly or indirectly. They are held for use in the production or supply of goods and services, have been acquired for use on a continuing basis, and are not intended for sale in the ordinary course of business. Examples of PPE assets include land, office and manufacturing buildings, production machinery, trucks, ships or aircraft used to deliver goods or
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