ACC 131 Lecture Notes - Lecture 7: Financial Statement, Macrs, Relate
Document Summary
Used in the normal course of operations to generate revenue. Intangible assets (patents, copyrights, trademarks, licenses, and goodwill) At acquisition (purchase: recorded at its cost- including the cost of acquiring the asset and the cost of preparing the asset for use (historical cost principle) Land (property): facility or office building; does not depreciate. Cost of fixed asset=expenditure necessary to acquire/prepare asset for use. Capitalized- expenditures that are included as part of cost of asset. Expensed immediately- expenditures that are not included as part of cost of asset. Typical costs of acquiring property, plant, and equipment. Historical cost principle: requires company record its fixed assets at exchange price at time asset is purchased: when cash is paid for asset, cash is given & expenditure necessary to prepare asset for use. All a part of historical cost of asset. Fixed assets can be purchased by issuing debt: asset valued at fair value of liability on date asset is acquired.
