RSM219H1 Lecture Notes - Lecture 9: Coastline Community College, Expense, Land Development

• School: UTSG
• Department: Rotman Commerce
• Course: RSM219H1
• Professor: Alexander Edwards

Document Summary

Chapter 9 - long lived assets: cost principle for fixed assets (plant property and equipment pp&e): Assets are capitalized based on all expenditures necessary to acquire the asset and make it ready for its intended use: examples of plant assets land, land improvements, buildings and equipment. Allocation not valuation; provides for the best matching of the expense recognition over the useful life in which the asset will produce revenue. Recognized as a period expense with the journal entry (dr. ) depreciation expense and (cr. ) Intangible assets: shown on the balance sheet at net amortized cost, include: patents, copyrights, trademarks, franchises and goodwill, r&d costs considered period expenses when incurred. Deprec: units-of activity, recognition of depreciation (cost allocation) on a per unit of production basis, calculation: cost salvage / total estimated production in units, journal entry: dr. depreciation exp cr. Computational - determination of acquisition costs to be capitalized.