Business Administration 2257 Lecture Notes - Intangible Asset, Molson Coors Brewing Company, Capital Asset
Document Summary
Accounting equation: assets = liabilities + owner"s equity. Opening r/e +net income - dividends = closing r/e (retained earnings) We don"t intend to convert these to cash in a year they indirectly contribute. We recognise them at the cost it took to acquire them (can be more than the sticker price land costs. , but you also have to pay taxes and other costs) You have to look at how long it"s going to be an asset the amount of time before you start spending more money fixing it than it brings in (look at other public companies to get an idea) Set these things up by class we estimate useful life based on this. We estimate buildings to be good for 40 years. Assets that contribute to earning revenue over more than one period (indirectly contribute) Not all capital assets appear on the balance sheet.