BUS 251 Chapter Notes - Chapter 8: The Purchase Price, Intangible Asset, Capital Cost Allowance
Document Summary
What are the various types of long-term assets: 3 categories of long term assets aka capital assets, property, plant and equipment. Intangible assets: goodwill, property, plant, and equipment are also known as tangible assets (physical presence, not purchased for resale. It is common for total purchase price and total appraised value to differ. If there is none -> expensed as period cost. Why do we depreciate ppe: we dep(cid:396)e(cid:272)iate ppe to allo(cid:272)ate a po(cid:396)tio(cid:374) of the asset"s (cid:272)ost to each of the periods in which the future economic benefits embodied in the asset are being consumed. If costs are capitalized, they will be expensed in the future years through the depreciation process: a po(cid:396)tio(cid:374) of asset"s (cid:272)ost is e(cid:454)pe(cid:374)sed a(cid:374)d (cid:396)epo(cid:396)ted i(cid:374) the sa(cid:373)e pe(cid:396)iod, different assets have different expected patterns of usage. Depreciation amount=cash estimated residual value: various depreciation methods.