BUS 320 Lecture Notes - Lecture 10: Impaired Asset, Book Value, Deferral

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 320
• Professor: Dennis Chung

Document Summary

Held for use in normal revenue producing activities (production, supply of goods/service, rental, administrative) Some require replacement or make less recurring replacements/nonrecurring replacements => recognize/derecognize replacing cost when recognition criteria are met. Major inspections: recognize inspection cost as replacement, derecognize remaining carrying amount of previous inspection costs. Asset componentization: recognize components separately if make up a relatively significant portion of total cost => different useful lives + economic benefit patterns = judgements. Purchase price: import duties, non-refundable taxes, minus discounts and rebates. Bring to location, condition ready for use (delivery, site preparation, installation, assembly, professional fees, borrowing costs for self-constructed assets etc) Discharge obligations associated with eventual disposal (dismantling, site restoration) Fv of acquired asset not reliably estimated => fv of shares given up. Nonmonetary exchanges: one/more items of ppe acquired in exchange for a non- monetary item/items (or a combination of monetary and nonmonetary assets)