BUS 251 Lecture Notes - Lecture 8: Book Value, Impaired Asset, The Purchase Price

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: Steve Gibson

Document Summary

There are three main categories of long-term assets, also known as capital assets: property, plant, and equipment, intangible assets, goodwill. Property, plant and equipment (pp&e) are also known as tangible assets as they have a physical presence. Include land, buildings, machinery, furniture, computer equipment, vehicles, planes, boats and so on. Companies purchase these assets to use them to generate revenues, either directly or indirectly, over multiple future period. While these assets may be sold when the company has finished using them, pp & e are not purchased for resale. Intangible assets are those long-term assets without physical form and include things such as trademarks, patents, copyrights, licenses, franchise rights, and customer lists. Intangible assets must be separately identifiable from other assets, which means that they can be resold, licensed, or rented. Very often, intangible assets have legal or contractual rights associated with them. Goodwill is a long-term asset that arises when two businesses are combined.