RSM220H1 Chapter Notes - Chapter 11: Impaired Asset, Rondas Ostensivas Tobias De Aguiar, Market Capitalization
Document Summary
Depreciation/amortization is a means of cost allocation; not valuation: process of allocating the depreciable amount of a ppe asset to expense in a systematic manner to those periods expected to benefit from its use. Amortization: general process of allocating the ca of any long lived asset to the accounting periods that benefit from its use. Depletion: use only with natural resource assets: will always be estimates ^ Asset components: the guide the componentization decision. Identify each part of a ppe asset whose cost is a significant portion of the total asset cost as a sep component. Group together significant components with similar useful lives and patterns of providing economic benefits. Add together the costs of the remaining parts of the asset, none of which are individually signif. Group together similar individual minor assets to dep as one component: both ifrs and gaap require to reco sep components for purpose of dep.
