ACG 2021 Lecture Notes - Lecture 12: Matching Principle, Regional Policy Of The European Union, Ddb Worldwide
12 Mar 2018
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Measuring the costs of plant assets sum of all costs incurred to bring the asset to its intended use. Purchase price, commissions, survey and legal fees, back property taxes paid, grading and removing unwanted buildings. Purchased: purchased price, broker"s commission, taxes paid, costs to repair and renovate. Constructed: architectural fees and contractors" charges, materials, labor, and overhead, interest on funds borrowed during the construction period. Purchase price, transportation, insurance in transit, sales tax, installation and testing. Land improvements parking lots, driveways, signs, fences, sprinkler systems. Improvements to lease property, depreciated or amortized over lease term. Several assets purchased in a group at one price. Total cost is allocated based on their market value. Capital expenditures increase the asset"s capacity or extend its useful life. Straight-line best for assets that generate revenue evenly, best meets matching principle. Units-of-production best for assets that wear out because of use. Double-declining-balance best for assets that generate revenue early in useful life.
