NPM804 Lecture 7: 20181018 - 7th Class - Costs and midterm review 3
Document Summary
Assets are recorded at their cost of acquisition. Great, it"s recorded on the statement of financial position at ,000. Also, acquisition cost includes things like architects" fees, reconstruction in the building, etc. Capital assets get used up but remain on the balance sheet at their cost. If you buy a car for ,000 and intend to use it for 10 years and think you"ll be able to sell it for at the end, you will charge / year in amortization expense. The car will always be ,000 on the statement. Amortization or depreciation = total cost of acquisition expected resale value / years [or months] If you perform services that earn revenue, the must be attributed to the time in which the services were performed. (even if you invoice for them in a different year) (even if you don"t want them to)
