• Historical Cost Model
    What is included in the cost basis of a long- lived asset? Explain for a least two types of such assets. Add the original price of your investment and any transaction costs. For example, if you buy 100 shares of stock at $10 per share and pay a $20 broker’s commission, your purchase expense...
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  • Accounting Cliff
    assumes that the cost of business assets will be recovered over time by way of profits that are generated by successful operations. The balance sheet values for long-lived assets such as land, building, and equipment are shown at their actual acquisition cost. Since there is no intention to sell...
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  • Documents
    identifiable intangible assets that meet the definitional and recognition criteria. If it doesn’t then it will be recorded as goodwill | | Depreciation/Amortization. of Long lived assets | U.S. GAAP requires the cost model of reporting for long lived assets | The cost model is permitted under IFRS...
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  • Property, Plant, and Equipment
    the historical cost model or the revaluation model. GAAP does not permit revaluations of property, plant, and equipment or mineral resources. Up to this point, we have assumed that companies use the historical cost principle to value long-lived tangible assets or fixed assets after acquisition...
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  • International Financial Statement Analysis Workbook
    completing this chapter, you will be able to do the following: • Explain the accounting standards related to the capitalization of expenditures as part of long-lived assets, including interest costs. • Compute and describe the effects of capitalizing versus expensing on net income, shareholders...
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  • Kim Park Non Monetary
    its aircraft fleet on a straight-line basis over 8 years to a 10% residual value. 4 Kim Park (A): Long-lived Nonmonetary Assets 110-017 Financial year 2002 (beginning April 1, 2001) was expected to be a disappointing one for SIA, primarily due to lower projected cargo and passenger...
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  • Accounting
    the customers. 10. An analysis of customer balances by the length of time they have been unpaid. CHAPTER 9 Reporting and Analyzing Long-Lived Assets How the Cost Principle Applies to Plant Assets Plant assets are long lived resources that 1...
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  • Paper 1
    , revalued amounts may also be used for presenting long-lived assets in the statement of financial position if certain conditions are met. Long-lived assets are primarily operational in character, and they may be classified into two basic types: tangible and intangible. Tangible assets have physical...
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  • Financial Statement Analysis
    current accounting procedures. 4–22. Identify five types of deferred charges and describe the rationale of deferral for each. 4–23. a. Describe at least two assets not recorded on the balance sheet. b. Explain how an analyst evaluates unrecorded assets. EXERCISES EXERCISE 4–1 Analyzing...
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  • International Accounting Summary
    earnings, and both gains and losses increase earnings volatility. Chapter Nine Additional Financial Reporting Issues Learning Objectives 1. Explain the concepts underlying two methods of accounting for changing prices (inflation)—general purchasing power accounting and current cost accounting...
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  • Mcs 2001
    be divided into two categories: controllable and non-controllable. The former category includes expenses that are controllable, at least to a degree, by the business unit manager - information technology services, for example: if these costs are included in the measurement system, profit will be...
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  • Segmental Reporting
    benefit (if included in the measure of segmental profit/loss) Equity in the net income of investments accounted for by the equity method, amount of investment in equity method investees Total expenditures for additions to long-lived assets Factors used to identifY the reportable segments • Basis for...
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  • Npo's Financial Statement Analysis
    of the investments purchased or even the lower of the fair market value or the historical cost. o Fixed Assets: This account is also called Property, Plant and Equipment. This amount includes the historical cost of land as well as the net book value of other long-lived physical assets. The net book...
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  • International Financial Reporting Standards
    Impairment of Long-Lived and Indefinite-Lived Assets: IAS 36 The indicators, timing and levels for long-lived and indefinite-lived asset impairment testing are similar under IFRS and U.S. GAAP. Goodwill and other indefinite-lived intangibles are tested for impairment at least annually, or more frequently...
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  • Cfa Study Guide
    interest coverage ratio of capitalizing interest costs; c. explain the circumstances in which software development costs and research and development costs are capitalized; d. identify the different depreciation methods for long-lived tangible assets, and discuss how the choice of method, useful lives...
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  • case 7-1
    accounts at the amount paid to acquire them. This cost, rather than current fair value, is the basis for subsequent accounting for nonmonetary assets. Most monetary assets are accounted for at fair value following their acquisition. 5. Dual-aspect. Every transaction affects at least two items and...
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  • Finance Accounting
    OBJECTIVES 1. Identify three major types of noncurrent assets: (1) property, plant, and equipment, (2) intangible assets, and (3) natural resources. Property, plant, and equipment (fixed assets) are tangible, long-lived assets. These assets consist of land, land improvements, buildings, factories...
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  • Case1
    life of the property, increase its capacity, and/or mitigate or prevent contamination from future operations. Environmental costs are also capitalized in recognition of legal asset retirement obligations resulting from the acquisition, construction and/or normal operation of a long-lived asset. Costs...
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  • Amman
    income every month. Those companies would have to place a sales value on every asset each time they wished to determine income. Critics raise similar objections against current cost (replacement cost, present value of future cash flows) and any other basis of valuation except historical cost. What...
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  • ifrs
    one-step impairment test. The carrying amount of an asset is compared with the recoverable amount. The recoverable amount is the higher of (1) the asset’s fair value less costs to sell or (2) the asset’s value in use. General Impairment of long-lived assets held for use The IFRS-based...
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