COMMERCE 1AA3 Lecture Notes - Lecture 23: Income Statement, Share Capital, Historical Cost
3 Nov 2016
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Document Summary
Every long-term asset except for land needs to be amortized. Tangible assets are resources that have physical substance and are used in the operation of a business. Depreciation expense is the cost of the asset allocated over its useful life. The depreciation is not the deduction in the value of the car, the value is determined by the market. Can no longer amortize goodwill, but can revalue it under ifrs. Involve rights, privileges, and competitive advantages that result from ownership of long-lived assets that do not possess physical sustenance. Tangible assets are measured at their acquisition costs. Cost include the cash equivalent purchase price plus all reasonable and necessary expenditures made to acquire and prepare the asset for its intended use. Interest while you are building is a part of the cost of acquiring the bulding. Purchased: land improvements (allowed to be depreciated) Depreciated or amortized over lease term: acquisition of noncash consideration.
