John Holtz C
Joan Holtz (C) c a s e r e p o r t
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Prepared by MBAxii G7 Mohamad Nizam Jaafar
Farithal B Sahari
Mizwan Mohamad Shahimin
Mohaini Ahmad Basri Submitted to Dr Nik Nazli Nik Ahmad On 18th August 2002
TABLE OF CONTENTS
| CONTENTS | | | PAGE NO. | | Abstract of the case | | | 3 | | | | | | | Scenario 1 : On self-constructed building | | | 4 | | Scenario 2 : On purchase land and building | | | 6 | | Scenario 3 : On purchase of a new machine | | | 8 | | Scenario 4 : On leased assets | | | 11 | | Scenario 5 : On Income Tax Credit | | | 13 | | Scenario 6 : On Upgrading an Equipment | | | 14 | | | | | | | Questions & Answers | | | 16 | | | | | | | Conclusion | | | 19 | | | | | | | Appendices : | | | 20 | | | | | | 1 | Further Information on Lease | | | i | 2 | Further Information on Research & Development Costs | | | ii | 3 | Further Information on Basket Purchase | | | iii | 4 | Copy of Original Case Question | | | iv | 5 | Copy of Oral Presentation Handouts | | | v | 6 | Copy of Oral Presentation Slides | | | vi | | | | | | | Main References | | | 23 |
ABSTRACT OF THE CASE
To be or not to be…that’s the question.
To capitalize or to expense, that’s the main theme of the case. Joan asked her professor on how to determine which expenditure is to be capitalized, and which to be expensed. She posed several situations to her professor. Basically, for each scenario given, capitalization of expenditure determined based on: 1. Necessity
2. Future benefits Nevertheless, difficulties arise in some at some situations, such that expenditures associated with leasing, taxes and R&D. In those cases, several factors or criteria outlined per
\
Prepared by MBAxii G7 Mohamad Nizam Jaafar
Farithal B Sahari
Mizwan Mohamad Shahimin
Mohaini Ahmad Basri Submitted to Dr Nik Nazli Nik Ahmad On 18th August 2002
TABLE OF CONTENTS
| CONTENTS | | | PAGE NO. | | Abstract of the case | | | 3 | | | | | | | Scenario 1 : On self-constructed building | | | 4 | | Scenario 2 : On purchase land and building | | | 6 | | Scenario 3 : On purchase of a new machine | | | 8 | | Scenario 4 : On leased assets | | | 11 | | Scenario 5 : On Income Tax Credit | | | 13 | | Scenario 6 : On Upgrading an Equipment | | | 14 | | | | | | | Questions & Answers | | | 16 | | | | | | | Conclusion | | | 19 | | | | | | | Appendices : | | | 20 | | | | | | 1 | Further Information on Lease | | | i | 2 | Further Information on Research & Development Costs | | | ii | 3 | Further Information on Basket Purchase | | | iii | 4 | Copy of Original Case Question | | | iv | 5 | Copy of Oral Presentation Handouts | | | v | 6 | Copy of Oral Presentation Slides | | | vi | | | | | | | Main References | | | 23 |
ABSTRACT OF THE CASE
To be or not to be…that’s the question.
To capitalize or to expense, that’s the main theme of the case. Joan asked her professor on how to determine which expenditure is to be capitalized, and which to be expensed. She posed several situations to her professor. Basically, for each scenario given, capitalization of expenditure determined based on: 1. Necessity
2. Future benefits Nevertheless, difficulties arise in some at some situations, such that expenditures associated with leasing, taxes and R&D. In those cases, several factors or criteria outlined per