MGAB02H3 Lecture Notes - Lecture 1: Accelerated Depreciation, Capital Asset
10 Jan 2017
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Capital asset: requires capital to be invested when purchasing: machinery helps generate profit and revenue, the more you produce the more return you get, long-term assets, ex. Need to accure interest on the loan until it is paid out: through equity. Publicly traded market value easy to come up with. Value of the asset can be measured based on the value of the item that is given up. Fair-value of market share given up is fair value of asset acquired: pay in cash. Net method when making purchases: on ongoing basis always account for discount. Buy building for , 000 and the seller has agreed a credit term of 2/10, net 30. Bulk purchase; basket purchase: paying only for one purchase, ex. House purchase: buying the land and the building: land doesn"t depreciate but buildings do; segregate the value for. The cost of all assets = all costs that are required to make the asset operational.
