ADM 1340 Lecture Notes - Lecture 9: Asset, Asset Turnover, Book Value

• School: University of Ottawa
• Department: Administration
• Course: ADM 1340
• Professor: Lamia Chourou

Document Summary

Acquisition( (cid:6629), use/depreciation, maintenance & repair, improvements, retirement: categories of pp&e, land, land improvements: fence, sidewalks, driveways, buildings, equipment. Ppe are tangible assets: have physical substance (use in business operations, but not. Investments) also called as: fixed assets or capital assets. Acquisition cost includes the purchase price and all normal and. Necessary expenditures to bring the asset to location. land improvements-costs of structural additions made to land. Land-purchased cost, fees or realtor, survey and legal fees, clearing, grading. Equipment-purchase price, provincial sales tax, freight charges and insurance. Excludes: expenditures unrelated to the acquisition, repair costs if an asset is damaged during installation, financing charges for purchasing asset(construct it by yourselfs) Depreciation is the process of allocating the cost of property, plant, and equipment over their productive lives. (cost, useful life, residual value ) Depreciation amount=cost-residual value carrying value=total depreciation amount - accumulated depreciation(1) Depreciation expense per year= cost-residual value/ useful life in years: diminishing balance .