(BQ) Part 2 book "Financial accounting" has contents: Investments - Property, plant, and equipment and intangible assets; statement of cash flows; analyzing financial statements; investments - Debt and equity securities; financing - Equity; financing - Long-term liabilities. | PART THREE Investing and Financing Activities 9 Investments: Property, Plant, and Equipment and Intangible Assets 10 11 Financing: Equity 12 © KAREN ROACH, 2009/USED UNDER LICENSE FROM Financing: Long-Term Liabilities Investments: Debt and Equity Securities 9 Investments: Property, Plant, and Equipment and Intangible Assets LEARNING OBJECTIVES After studying this chapter, you should be able to: LO1 Identify the two major categories of long-term operating assets: property, plant, and equipment and intangible assets. A company needs an infrastructure of long-term operating assets in order to produce and distribute its products and services. In addition to property, plant, and equipment, long-term operating assets also include intangible items like patents and licenses. LO2 Understand which factors are important in deciding whether to acquire a long-term operating asset. A company should purchase a long-term operating asset if the future cash flows expected to be generated by the asset are “large” in comparison to the cost to purchase the asset. LO3 Record the acquisition of property, plant, and equipment through a simple purchase as well as through a lease, by self-construction, and as part of the purchase of several assets at once. The recorded cost of property, plant, or equipment includes all costs needed to purchase the asset and prepare it for its intended use. Assets can be acquired through purchase, leasing, exchange, self-construction, or the purchase of an entire company. LO7 Record the discarding and selling of property, plant, and equipment. Upon the disposal of a long-term operating asset, a gain or loss is recognized if the disposal proceeds are more or less, respectively, than the remaining book value of the asset. LO8 Account for the acquisition and amortization of intangible assets and understand the special difficulties associated with accounting for intangibles. Because the traditional accounting model is .
