Chapter 6 - Accounting for and presentation of property, plant, and equipment, and other noncurrent assets. After reading this chapter, you should be able to answer the following questions: How are the costs of land, buildings, and equipment reported on the balance sheet? How are the terms capitalize and expense used with respect to property, plant, and equipment?. | © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Accounting: What The Numbers Mean Tenth Edition Marshall, McManus, and Viele Chapter 6 Accounting for and Presentation of Property, Plant, and Equipment, and Other Noncurrent Assets PowerPoint Authors: Susan Coomer Galbreath, ., CPA Charles W. Caldwell, ., CMA Jon A. Booker, ., CPA, CIA Cynthia J. Rooney, ., CPA Chapter 6: Accounting for and Presentation of Property, Plant, and Equipment, and Other Noncurrent Assets Land Equipment Buildings Intangible Assets Natural Resources 1) Classified as assets because they are owned by the organization. 2) Have the ability to generate revenue beyond one year. Noncurrent Assets 6- Noncurrent assets include land, buildings, equipment, intangible assets, and natural resources. Decline in asset value over its useful life Acquisition Accounting for acquisition of the asset. Use Accounting for depreciation of the asset. Accounting for maintenance and repair costs. Disposal Accounting for the disposition of the asset. Primary Issues for Noncurrent Assets 6- Recording the acquisition, use (depreciation, maintenance, and repair costs), and disposal of noncurrent assets are primary issues in accounting. Land is a non-depreciable asset. Purchase price Real estate commissions Title insurance premiums Delinquent taxes Razing costs of building on the land Title and legal fees All costs incurred to get land ready for use are capitalized. LO 1 Land 6- Learning Objective 1: Explain how the cost of land, buildings, and equipment is reported on the balance sheet. The acquisition cost of land includes all the costs incurred to get the land ready for use. Capitalized costs include the purchase price, real estate commissions, title and legal fees, costs of razing a building on the land, and delinquent taxes. Note that land is not depreciated. Purchase price Architectural fees Excavation and construction costs Installation costs Transportation costs All costs | © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Accounting: What The Numbers Mean Tenth Edition Marshall, McManus, and Viele Chapter 6 Accounting for and Presentation of Property, Plant, and Equipment, and Other Noncurrent Assets PowerPoint Authors: Susan Coomer Galbreath, ., CPA Charles W. Caldwell, ., CMA Jon A. Booker, ., CPA, CIA Cynthia J. Rooney, ., CPA Chapter 6: Accounting for and Presentation of Property, Plant, and Equipment, and Other Noncurrent Assets Land Equipment Buildings Intangible Assets Natural Resources 1) Classified as assets because they are owned by the organization. 2) Have the ability to generate revenue beyond one year. Noncurrent Assets 6- Noncurrent assets include land, buildings, equipment, intangible assets, and natural resources. Decline in asset value over its useful life Acquisition Accounting for acquisition of the asset. Use Accounting for depreciation of the asset. Accounting for maintenance and repair costs. .
