MGAB01H3 Lecture : Property

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10 Nov 2010
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MGAB01H3 Full Course Notes
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These tangible assets are used in the operation of a business. Determining the cost of property, plant, and equipment. These tangible assets are recorded at historical cost, in accordance with the cost principle. All the cost required to make the capital assets are capitalized (recorded as a capital asset), rather than expensed, because they will provide benefits over future periods. Cost is measured based on the cash paid or cash equivalent. The cash equivalent price is the fair market value of the asset given up. Of, if that value is not clearly determinable, the cash equivalent price is the fair market value of the asset received. Once cost is established, it becomes the basis of accounting for the asset over its. Property, plant and equipment are often subdivided into four classes: land, land improvements, buildings, equipment. Land the cost of land includes the purchase price and other related costs (survey and legal fees).

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