ACC 342 Lecture Notes - Lecture 14: Sales Tax, International Financial Reporting Standards, Financial Statement
Property, plant, and equipment and intangible assets are long-term, revenue producing assets.
T
Sales tax paid on equipment acquired for use in the business is not capitalized.
F
Demolition costs to remove an old building from land purchased as a site for a new building are
considered part of the cost of the new building.
F
The initial cost of property, plant, and equipment includes all the identifiable expenditures necessary to
bring the asset to its desired condition and location for use.
T
A distinguishing characteristic of intangible assets is the degree of uncertainty about when or if they will
provide future benefits.
T
Costs incurred after discovery of a natural resource but before production begins are reported as
expenses of the period in which the expenditures are made.
F
The relative fair values are used to determine the valuation of individual assets acquired in a lump-sum
purchase.
T
The fair value of the asset, debt, or equity securities given in a noncash acquisition should determine the
value of the consideration received.
T
Under current GAAP, fair value is used to measure the components of all nonmonetary exchanges.
F
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Document Summary
Property, plant, and equipment and intangible assets are long-term, revenue producing assets. Sales tax paid on equipment acquired for use in the business is not capitalized. Demolition costs to remove an old building from land purchased as a site for a new building are considered part of the cost of the new building. The initial cost of property, plant, and equipment includes all the identifiable expenditures necessary to bring the asset to its desired condition and location for use. A distinguishing characteristic of intangible assets is the degree of uncertainty about when or if they will provide future benefits. Costs incurred after discovery of a natural resource but before production begins are reported as expenses of the period in which the expenditures are made. The relative fair values are used to determine the valuation of individual assets acquired in a lump-sum purchase.
