BADM*1060 Lecture Notes - Lecture 1: Disclose, Book Value, Title Insurance
Document Summary
Cast consist of all expenditure necessary to acquire asset and make it ready for its intended use. Two criteria apply when determining operating or capital expenditure: Benefit period: the life of the asset or one year. Examples: overhaul engine (ce capital expenditure, paint logo on truck (either, insurance (oe operating expenditure, truck licence (oe, oil change (oe) In some companies, there are significant costs associated with retiring a long-lived asset (eg. These costs are estimated in advance and included as part of the cost of the asset. Closing costs such as title and legal fees. The cost of the structural addictions made to land (eg. All necessary expenditures relating to the purchase or construction of a building. When a building is purchased, such costs include: purchase price, closing costs (legal fees, title insurance) When a building is constructed, its cost consists of: Provincial sales tax but not gst/hst. Freight charges and insurance during paid by its purchaser.
