BUS 251 Chapter Notes - Chapter 8: Mortgage Loan, Actuary, Treasury Stock
Document Summary
Chapter 8 capital assets tangible and intangible. Capital assets: assets with lives longer than a year (or operating cycle) that are used in the company"s operations to generate revenue. Tangible assets: which are usually defined as those assets with some physical form. Intangible assets are non-current assets that are associated with certain legal rights or privileges the company has, such as patents, trademarks, leases and goodwill. When a company buys a capital asset: it has to the right to use the asset and a transaction as occurred. Must have future value, either it generate revenues, usually by producing products, facilitating sales, or providing services. The future value is represented by the cash that will eventually be received from the sales of products and services. Second source of value for capital assets is their ultimate disposal value which is called residual value (or resale value).