ACCO 310 Lecture Notes - Lecture 9: Retained Earnings, Natural Resource, Capital Expenditure
27 Sep 2016
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Pp+e tangible capital assets, plant assets, fixed assets. Acquired and held for use in operations and not for resale. Componentization use professional judgements, required under aspe and ifrs, if rep big portion of asset"s total cost. Costs of self-constructed assets: dm, dl and voh. Ifrs: if incurred during acquisition, construction or production capitalized as part of asset cost. Aspe: allows choice of capitalizing or expensing interest costs. Asset retirement costs dismantling and restoration costs capitalize under asset cost. Net of discount method - preferred for purchase of plant assets, cost is reduced by discount even if not taken. Deferred payment contracts long term credit, recorded at present value. When no interest rate is state, cash price of purchased asset is used to determine interest rate. Lump-sum purchase: acquisition costs allocated to assets based on relative fair market values. If no fair value of asset given, market value of shares is used.
