COMM-3016EL Chapter Notes - Chapter 10: Deferral, Impaired Asset, Financial Statement

• School: Laurentian
• Department: Commerce and Administration
• Course: COMM-3016EL
• Professor: Jo- Anne Ryan

Document Summary

Too much investment in long-lived assets results in costly overcapacity, and too little investment means lost opportunities for profits and future cash flows. Both situations lower the company"s rate of return. Pp&e (tangible/fixed assets) includes long-term resources such as office, factory, and warehouse buildings; investment property; equipment (machinery, furniture, & tools); and mineral resource properties. Any items that have multiple uses and are regularly used and replaced should be classified as inventory. Major spare parts and standby or servicing equipment used only with a specific capital asset and useful for more than one period are classified as items as pp&e. As previously discussed, biological assets living plants and animals have all the characteristics necessary to be items of pp&e entities apply the same accounting principles used for other items of pp&e under aspe. Those using ifrs are required to follow specific standards for biological assets & agricultural produce.