Lecture International accounting: Chapter 8 - Nguyễn Quốc Nhất

Lecture "International accounting - Chapter 8: Plant assets and intangible" has content: Mesuring a the cost of a plant asset, depreciation, displosing the plant asset, displosing the plant asset, accounting for intangible assets, ethical issue.
Nội dung trích xuất từ tài liệu:
Lecture International accounting: Chapter 8 - Nguyễn Quốc NhấtIFAChapter 8: Plant Assets and IntangiblePlant Assets and IntangibleLOGOInternational Accounting of FinancialMA. Nguyen Quoc NhatNguyen Quoc Nhat – nhatnq.faa@gmail.comLearning ObjectivesChapter’s contentLearning ObjectivesMeasure the cost of a plant assetAccount for depreciationRecord the disposal of an asset by sale or tradeAccount for natural resourcesAccount for intangible assetsDescribe ethical issues related to plant assetsNguyen Quoc Nhat – nhatnq.faa@gmail.comCompany LogoCompany Logo8.1 Mesuring a the cost of a plant Asset8.1 Mesuring a the cost of a plant Asset8.2 Depreciation8.3 Displosing the plant Asset8.4 Accounting for natural Resources8.5 Accounting for Intangible Assets8.6 Ethical Issuewww.themegallery.comCompany Logo8.1 Mesuring a the cost of a plant AssetThe cost principle says to carry an asset atits historical cost—the amount paid for theasset. The rule for measuring cost is asfollows:Cost of an asset = Sum of all the costsincurred to bring the asset to its intendedpurpose, net of all discountsLand and land Improvementswww.themegallery.comwww.themegallery.comMA.NguyenQuocNhatCompany LogoThe cost of land is not depreciated. It includes thefollowing costs paid by the purchaser:● Purchase price● Brokerage commission● Survey and legal fees● Property taxes in arrears● Taxes assessed to transfer the ownership (title)on the land● Cost of clearing the land and removing unwantedbuildingsCompany Logo1IFAChapter 8: Plant Assets and Intangible8.1 Mesuring a the cost of a plant AssetThe cost of land does not include thefollowing costs:● Fencing● Paving● Sprinkler systems● Lighting● Signswww.themegallery.comSuppose Smart Touch needs property andpurchases land for $50,000 with a notepayable for the same amount. Smart Touchalso pays cash as follows: $4,000 in propertytaxes in arrears, $2,000 in transfer taxes,$5,000 to remove an old building, and a$1,000 survey fee. What is the company’scost of this land? This Exhibit shows all thecosts incurred to bring the land to itsintended use:Company Logo8.1 Mesuring a the cost of a plant Assetwww.themegallery.comCompany Logo8.1 Mesuring a the cost of a plant AssetThe entry to record the purchase of the landon August 1, 2013, follows:Measuring the Cost of LandPurchase price of land$50,0002013Add related costsProperty taxes in arrears8.1 Mesuring a the cost of a plant AssetAug 1$4,000Land (A+)62,000Transfer taxes2,000Note payable (L+)50,000Removal of building5,000Cash (A–)12,000Survey fee1,000Total cost of land12,000$62,000www.themegallery.comCompany Logo8.1 Mesuring a the cost of a plant AssetSuppose Smart Touch then pays $20,000for fences, paving, lighting, landscaping,and signs on August 15, 2013. The followingentry records the cost of these land2013Aug 15 Land improvements (A+)Cash (A–)www.themegallery.comMA.NguyenQuocNhat20,00020,000Company Logowww.themegallery.comCompany Logo8.1 Mesuring a the cost of a plant Asset8.1.2 BuildingsThe cost of a building depends on whether thecompany is constructing the building itself or isbuying an existing one. These costs include thefollowing:Constructing a BuildingArchitectural feesBuilding permitsContractor chargesPayments for material, labor, and overheadCapitalized interest cost, if self-constructedwww.themegallery.comCompany Logo2IFAChapter 8: Plant Assets and Intangible8.1 Mesuring a the cost of a plant Asset8.1 Mesuring a the cost of a plant AssetPurchasing an Existing BuildingPurchase priceCosts to renovate the building to readythe building for use, which may includeany of the charges listed under“Constructing a Building”8.1.3 Machinery and Equipmentwww.themegallery.comwww.themegallery.comCompany Logo8.1 Mesuring a the cost of a plant AssetThe cost of machinery and equipment includesits● purchase price (less any discounts),● transportation charges,● insurance while in transit,● sales tax and other taxes,● purchase commission,● installation costs, and● the cost of testing the asset before it is used.Company Logo8.1 Mesuring a the cost of a plant Asset8.1.4 Furniture and FixturesFurniture and fixtures include desks, chairs,file cabinets, display racks, shelving, and soforth. The cost of furniture and fixturesincludes the basic cost of each asset (lessany discounts), plus all other costs to readythe asset for its intended use.8.1.5 A Lump-Sum (Basket) Purchase of Assetswww.themegallery.comwww.themegallery.comCompany Logo8.1 Mesuring a the cost of a plant AssetA company may pay a single price for severalassets as a group—a “basket purchase.”For example, Smart Touch may pay a single pricefor land and a buildingFor accounting, the company must identi ...