Financial Accounting for Managers, 3rd Edition

9

Accounting for Fixed Assets and Depreciation

CHAPTER OBJECTIVES

This chapter will help the readers to:

• Differentiate between operating expenses and capital expenditure.
• Indentify tangible assets and intangible assets.
• Understand the principles involved in ascertaining the cost of acquired assets and selfgenerated assets.
• Appreciate the treatment of expenditure on improvement, repair and maintenance.
• Understand the concept of depreciation, depletion and amortization.
• Apply different methods for calculating depreciation.
• Understand the accounting of sale, exchange and discarding of fixed assets.
• Understand the impact of change in method of depreciation and impairment of assets on the financial statements of a company.
• Identify the issues ...