BU227 Lecture Notes - Lecture 9: Intangible Asset, Software, Oil Reserves
Document Summary
Reporting and interpreting property, plant, and equipment; natural. Intangibles and other nothings. name, logo, slogans, computer software, and landing rights. intellectual property: copyrights, patents, licences, trademarks, software, franchises, and subscription lists. Fixed asset turnover ratio: how effectively is management utilizing its property, plant, and equipment to generate revenues, measures the sales dollars generated by each dollar of fixed assets used, a high rate normally suggests effective management. Measuring and recording acquisition cost: we say that the costs are capitalized when they are recorded as assets instead of as expenses in the current period. Interest charges should be reported as interest expense: a company may acquire undeveloped land, typically with the intent to build a new factory or office building. For debt-- assume that westjet signed a note payable for the aircraft and paid cash for the transportation and preparation costs. For equity (or other non-cash consideration: common shares, or a right given to the seller)
