MGAB02H3 Lecture Notes - Westjet, Asset, Natural Resource
Document Summary
To classify as a long-term asset it must satisfy two conditions: Actively used in operations (production or sale of other assets or services) Expected to benefit future periods greater than 1 year. Note: assets held for sale or for future use are not classified as plant and equipment, but as long term investment. There are two types of long term assets (both subject to amortization): Tangible as having physical substance: non-depreciable asset (ie: land, assets subject to amortization (ie: building and equipment, furniture and fixtures, natural resource assets subject to depletion (ie: mineral deposits, timber) Intangible as having no physical substance: value represented by rights that produce benefits (ie: patents, copyrights, trademarks, franchises, goodwill) What is included in the cost of an asset. Acquisition cost includes the purchase price and all expenditures needed to prepare the asset for its intended use. Note: does not include financing charges except for self constructed assets.
