REPORTING AND ANALYZING LONG-LIVED ASSETS
After studying this chapter, you should be able to:
- Describe how the historical cost principle applies to plant assets.
- Explain the concept of depreciation.
- Compute periodic depreciation using the straight-line method, and contrast its expense pattern with those of other methods.
- Describe the procedure for revising periodic depreciation.
- Explain how to account for the disposal of plant assets.
- Describe methods for evaluating the use of plant assets.
- Identify the basic issues related to reporting intangible assets.
- Indicate how long-lived assets are reported in the financial statements.
A TALE OF TWO AIRLINES
So, you're interested in starting a new business. Have you thought about the airline industry? Is your only experience with airlines as a passenger? Don't let that stop you. Today, the most profitable airlines in the industry are not well-known majors like American Airlines and United. In fact, most giant, older airlines are either bankrupt or on the verge of bankruptcy. In a recent year, ...