ACC 110 Chapter Notes - Chapter 9: Finance Lease, Operating Lease, Book Value
3 Feb 2017
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Chapter 9 reporting and analyzing long-lived assets. Recorded at cost, which includes: purchase price (+ non-refundable taxes, - discounts), expenditures necessary to make asset ready for use, estimated cost of future obligations at the end of the useful life (called asset retirement cost) Some costs are expensed, some are capitalized as an expense, maintain an asset in its normal operating condition & usually. Operating expenditures benefit only current period, immediately charged. Capital expenditures capitalized as an asset, benefit future periods, add to. Ppe classification land, land improvements, buildings, equipment. Once land is ready for use, debit any recurring costs such as property taxes as operating expenses made after acquisition and recorded separately from land. Land has an unlimited lifespan so it is not depreciated. Land improvements costs of structural additions made to land, typically. They are depreciated over their useful lives.
