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International Financial Statement Analysis, 3rd Edition by Anthony T. Cope, Michael A. Broihahn, Wendy L. Pirie, Elaine Henry, Thomas R. Robinson

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CHAPTER 9

LONG-LIVED ASSETS

Elaine Henry, CFA

Elizabeth A. Gordon

LEARNING OUTCOMES

After completing this chapter, you will be able to do the following:

  • Distinguish between costs that are capitalized and costs that are expensed in the period in which they are incurred.
  • Compare the financial reporting of the following classifications of intangible assets: purchased, internally developed, acquired in a business combination.
  • Explain and evaluate the effects on financial statements and ratios of capitalizing versus expensing costs in the period in which they are incurred.
  • Describe the different depreciation methods for property, plant, and equipment and the effects of the choice of depreciation method and the assumptions concerning useful life and residual value on depreciation expense, financial statements, and ratios.
  • Calculate depreciation expense.
  • Describe the different amortization methods for intangible assets with finite lives and the effects of the choice of amortization method and the assumptions concerning useful life and residual value on amortization expense, financial statements, and ratios.
  • Calculate amortization expense.
  • Describe the revaluation model.
  • Describe the impairment of property, plant, and equipment and intangible assets.
  • Describe the derecognition of property, plant, and equipment and intangible assets.
  • Explain and evaluate the effects on financial statements and ratios of impairment, revaluation, and derecognition of property, plant, and equipment and intangible ...

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