ACCTG 2600 Lecture Notes - Lecture 16: Intangible Asset, Capital Expenditure, Broadcast License
18 Apr 2017
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9:24 pm: operating assets, presented in two categories on the balance sheet: Intangible assets: essential to a company"s long-term future. Taxes paid at time of purchase (for example, sales tax) Land improvements wear out, but land does not!! Example: costs of paving a parking lot and landscaping costs. Should be depreciated over their useful lives. Example: purchase of land, 600,000, cost to clear the land, 200,000, cost of paving, 100,000, cost of lighting for the parking lot, 50,000. If it loses value, you have to write it down, but if it gains value you can not write it up. Book value = acquisition cost accumulated depreciation. On the quiz: r&d costs are always expensed!! Patent account should not include the costs of research and development of a new product: amortization of intangibles, intangibles with finite life must be amortized. Recorded over the legal life or the useful life, whichever is shorter.
