ADM 1340 Chapter Notes - Chapter 9: The Purchase Price, Title Search, Book Value

• School: University of Ottawa
• Department: Administration
• Course: ADM 1340
• Professor: Darlene Himik

Document Summary

Long-lived resources that a company controls and are tangible. Used for the production and sale of goods or services to customers, for rental to others, or. Provide benefits for many years for administrative purposes. Determining which costs to include and not include requires professional judgement. Operating expenditures costs that benefit only the current period (these are expensed) Capital expenditures costs that benefit future periods are capitalized (included) in a long-lived asset account and recorded as either property, plant, or equipment. Ex) an equipment"s insurance should be capitalized because the insurance during transit is part of the cost of obtaining the asset. But insurance paid to insure the asset against fire or theft after it is situated and in use would be expensed. Ex2) costs to train employees are expensed because their costs required to get the employee ready to effectively contribute at the workplace. Asset retirement costs obligations to dismantle, remove, or restore the long-lived asset when it is retired.