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Chapter 7

COMM 111 Chapter Notes - Chapter 7: Ddb Worldwide, Book Value


Department
Commerce
Course Code
COMM 111
Professor
caramitchell
Chapter
7

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COMM 611
Chapter 7: Property, Plant and Equipment, and Intangible Assets
Describe the Types of Tangible and Intangible Assets A Business may Own
Tangible Long-Lived assets
Property, plant and equipment
o i.e buildings, planes & equipment
o cost of assets must be expensed over their useful life
o land is not expensed over time because its usefulness does not
decrease
Intangible Assets
useful because of special rights they carry
no physical form
o i.e patents, copyrights and trademarks (same with goodwill)
Measure and Account for the Cost of Property, Plant and Equipment
*cost of any asset is the sum of all the costs incurred to bring the asset to its location
and intended use
Land
cost of land does not include land improvements (separate account, subject
to depreciation)
Building, Machinery and Equipment
cost of machinery and equipment includes purchase price, transportation,
insurance while in transit, non-refundable sales and other taxes
o once the equipment is up and running any insurance, taxes and
maintenance costs are recorded as expenses and not part of the assets
cost
Land Improvements and Leasehold Improvements
accounts improve driveways, signs, fences and sprinkler systems
since they are subject to decay they are also depreciated
Lump-Sum (or Basket) Purchases of Assets
when businesses purchase several assets as a group for a single lump sum
amount
company should identify cost of each asset, with each cost being divided
among assets
find more resources at oneclass.com
find more resources at oneclass.com
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