MGAB02H3 Lecture Notes - Financial Statement

Property, plant, and equipment is normally audited in adifferent manner than current asset accounts. Why is this so?Discuss the differences in how property, plant, and equipment isaudited compared to current assets.

The classified balance sheet will show which asset subsections?

a. current assets and other equity

b. current liabilities and short-term assets

c. other revenues and property, plant, and equipment

d. current assets and property, plant, and equipment

Property, plant and equipment (fixed assets) are valued at historical cost, the cost of the asset plus transportation and setup cost. The costs of fixed assets are capitalized based on the company’s capitalization policy (threshold for determining fixed assets) and expensed over time referred to as depreciation expense. Do you think fair market value should be used instead?