ACC 210 Lecture Notes - Lecture 7: Financial Statement, Internal Revenue Code, Asset
Document Summary
Capitalize - record an expenditure of cash as an asset (not an expense) Assets are recorded at: cost of asset + all expenditures necessary to get it ready for use. Land - land used for operations (factory sites, retail operations, corporate hq) Land improvements include: parking lots, sidewalks, driveways, landscaping, lighting systems, fences, sprinklers, etc. Costs to capitalize will include purchase price and other acquisition costs (real estate commissions, title fees, land clearing, etc. ) Note that current year taxes are not capitalized (they are expenses) Depletion - allocation of the cost of a natural resource over its service life. Administrative offices, retail stores, manufacturing facilities, and storage warehouses. As with land, costs to capitalize in the buildings account will include purchase price, commissions paid, architectural fees (for new construction), remodeling/upfit costs, etc. Machinery used in manufacturing, computers, and other office equipment, vehicles, furniture, and fixtures installation costs, etc.
