BUSN1001 Lecture Notes - Lecture 5: Accrual, Asset, Gross Profit
Document Summary
Depreciation: systematic allocation of the loss of a tangible asset over its useful life, amortisation is the same concept however applied to intangible assets, does not involve cash flows, recognised as depreciation expense, dr depreciation expense. Cr accumulated depreciation: the accumulated depreciation account reflects the total depreciation that has been charged to statement of profit or loss in relation to an asset up to a point in time. Assumes same level of usage across its whole life. Impairment loss: overstatement of the carrying amount (value after depreciation has been considered) of an asset over its recoverable amount (the highest of the value in use and the net selling price) It does represent the loss in the asset"s value during the reporting period. Cr accumulated impairment losses: the accumulated impairment loss account reflects the total impairment that has been charged to a statement of profit or loss in relation to an asset up to a point in time.
