BUSI 2160U Lecture Notes - Lecture 3: Book Value, Intangible Asset, Capital Asset
Document Summary
Capital assets: are resources that contribute to earning revenue over more than one period. It is the resources to help the business run. Categories: property, plants, and equipment (ppe) Tangible assets that are used to produce or supply goods or services to consumers, rented to customers, or used for administrative purposes. Expected to be used for more than one period. Not sold in ordinary course of business (but can be sold) Intangible asset that arises when one business acquires another and pays more than the fair value of the net asset purchases. The cost of ppe: costs should include all cost to purchase (or build) the asset to get it ready. Depreciation: systematic allocation of the depreciable amount of an asset over its useful life. 3 methods of depreciation: straight line method, accelerated method, usage based method. Assumes the asset contributes equally to revenue generation each period. Allocates the same amount of depreciation to each full period.
