BU227 Chapter Notes - Chapter 9: Impaired Asset, Financial Statement, Historical Cost
Document Summary
Tangible assets have physical substance: land land does not become obsolete, buildings, fixtures, and equipment, natural resources. Intangible assets have property ownership rights but not physical substance. Often, intangible assets arise from intellectual effort and are known as intellectual property copyrights, patents, licenses, trademarks, software, franchises, etc. Long lived assets are tangible or intangible resources owned by a business and used in its operations to produce benefits over several years. Long-lived assets are acquired, constructed, or developed or use on a continuing basis. Long-lived assets have the following characteristics: tangible assets, intangible assets. The cost principle requires that all reasonable and necessary costs incurred in acquiring a long-lived asset, placing in its operational setting, and preparing it for use should be recorded in a designated asset account. Acquisition cost the net cash equivalent amount paid or to be paid for the asset. Purchasing an old building renovation and repair costs must be included.
