(BQ) Part 2 book "Accounting principles: A business perspective (volume 1: Financial accounting)" has contents: Property, plant, and equipment, stock investments, analysis using the statement of cash flows, analysis and interpretation of financial statements, managerial accounting concepts/job costing,.and other contents. | This book is licensed under a Creative Commons Attribution License 10. Property, plant, and equipment Learning objectives After studying this chapter, you should be able to: • List the characteristics of plant assets and identify the costs of acquiring plant assets. • List the four major factors affecting depreciation expense. • Describe the various methods of calculating depreciation expense. • Distinguish between capital and revenue expenditures for plant assets. • Describe the subsidiary records used to control plant assets. • Analyze and use the financial results—rate of return on operating assets. A company accountant's role in managing plant assets Property, plant, and equipment (fixed assets or operating assets) compose more than one-half of total assets in many corporations. These resources are necessary for the companies to operate and ultimately make a profit. It is the efficient use of these resources that in many cases determines the amount of profit corporations will earn. Accountants employed by a company are deeply involved in nearly all decisions regarding the company's fixed assets, from pre-acquisition planning to the ultimate disposal or sale of those assets. Companies do not view an asset acquisition as merely a purchase, but as an investment. For example, should your company or client purchase an airplane to visit clients? Accountants will investigate all the benefits, both financial and intangible, and compare these benefits to the costs. By determining whether or not the airplane will be a good investment for the company, the accountant can assist the company in making sound strategic business decisions. Since these assets are so closely related to profits, good management is required. In accounting terms, a good return on operating assets is crucial to the success of the corporation. Many corporations have a staff of accountants whose primary task is to manage operating assets. This task involves making decisions concerning the .
