COMMERCE 1AA3 Study Guide - Final Guide: Canadian Tire, Book Value

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 1AA3
• Professor: Aadil Merali Juma

Document Summary

Long lived asset : are actively used in operations to generate future benefit beyond one year: tangible asset. Property, plant, equipment, fixed asset, capital asset, operational asset, amortizable asset, natural resource, and land. All tangible asset has depreciation, except for land. Cash equivalent purchase price + all reasonable/necessary expenditure = acquire and prepare the asset for its intended use. Cost of land=purchase price + commissions + survey & legal fee + back property taxes paid + grading/removing unwanted buildings. Such as: patents , copyright, trademarks, franchise, goodwill. Intangible asset are amortizable (the cost of amortizable should be add into every year : lump-sum purchases. Business purchase several assets as a group for a single lump- sum amount. (cost of land) = total cost x % of total market value (market value total market value) Subsequent cost: capital expenditure(depreciation cost): increase the productive life/operating efficiency/ capacity of the asset.