Skip to Main Content
Problem Solving Survival Guide Volume I: Chapters 1-12 to accompany Accounting Principles, 11th Edition
book

Problem Solving Survival Guide Volume I: Chapters 1-12 to accompany Accounting Principles, 11th Edition

by Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
November 2012
Beginner to intermediate content levelBeginner to intermediate
414 pages
9h 26m
English
Wiley
Content preview from Problem Solving Survival Guide Volume I: Chapters 1-12 to accompany Accounting Principles, 11th Edition

CHAPTER 10

images

PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLE ASSETS

OVERVIEW

Assets that have physical existence and that are expected to be used in revenue-generating operations for more than one year or operating cycle, whichever is longer, are classified as plant assets. Some problems may arise in determining the acquisition cost of a plant asset. For example, the initial acquisition may be the result of several expenditures or additional expenditures may be involved subsequent to acquisition.

Expenses arise from the cost of goods or services that are consumed in the process of generating revenue. When a long-term tangible asset (plant asset) is acquired, it actually represents a bundle of future asset services. The total cost of these services equals the acquisition cost of the asset minus the asset's expected market value at the end of its useful life. As a productive asset is used, services (benefits) are consumed; therefore, a portion of the original asset cost should be charged to expense, in order to comply with the expense recognition (matching principle). The process of allocating (expensing) the cost of long-term tangible assets over the accounting periods during which the asset is used is called depreciation.

An entity commonly disposes of plant assets before or at the end of their estimated service lives. The disposal may be by retirement, sale or exchange. The asset's ...

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

Problem Solving Survival Guide for Intermediate Accounting, 15th Edition, Instructor's Manual: Volume II: Chapters 15-24

Problem Solving Survival Guide for Intermediate Accounting, 15th Edition, Instructor's Manual: Volume II: Chapters 15-24

Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

Publisher Resources

ISBN: 9781118342138Purchase book