AFM101 Chapter Notes - Chapter 9: Capital Cost Allowance, Historical Cost, Web Development

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM101
• Professor: Donna Psutka

Document Summary

Chapter 9: reporting & interpreting property, plant, and equipment; natural resources; and. Acquisition and maintenance of property, plant, and equipment. They can be tangible assets or intangible assets. Tangible assets (or fixed assets) have physical substance. This classification is most called property, plant, and equipment: land reported on balance sheet as a separate item if it has a material value. Intangible assets have property ownership rights but no physical substance: frequently arise from intellectual property copyrights, patents, licences, trademarks, software, subscription list, franchise, etc. Cost principle requires that all reasonable and necessary costs incurred in acquiring a long-lived asset, placing in its operation setting, and preparing it for use should be recorded in a designated asset account. Acquisition cost net cash-equivalent amount paid or to be paid for the asset. By construction: capitalized interest the interest on borrowed funds directly attributable to construction until the asset is ready for its intended use.