BUS 322 Lecture Notes - Capital Asset, Deferred Income, Book Value

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 322
• Professor: Maureen Fizzell

Document Summary

Pp&e are defined as assets with the following properties: (607) Held for use in the production of goods and services, for rental to others, or for administrative purposes, but not for sale in the ordinary course of business. They are used over more than one accounting period and are usually depreciated, except land. It is probable that the item"s associated future economic benefits will flow to the entity. An entity would only separate out components that make up a relatively significant portion of the asset"s total cost or have different useful lives/patterns of depreciation. Capitalization stops when the asset is in place and ready to be used as management intended, even if it has not begun to be used of is used at less than a desirable capacity level. Any cost/revenue that is not necessary to develop the asset is recognized in income when incurred of earned, i. e. cannot be capitalized.