Fixed Assets & Intangibles Flashcards
Capitalized or Expensed: costs incurred to get asset in a state of ready to use
Capitalize
Capitalized or Expensed: costs incurred after the asset is in a state of ready to use
Expense
What are included in the cost to land?
purchase price
broker commission
title and recording fees
legal fees
surveying charges
any existing obligations assumed by the buyer
price paid to demolish an old building
What are removed from cost of land?
proceeds from sale of scrap recovered from demolition
what are included in costs of buildings?
purchase price
alteration and improvement costs
architect fees
deferred repairs
excavation cost
delinquent taxes
what are included in cost of equipment?
purchase price
transportation
sales and excise tax
legal fees
delinquent taxes
title cost
in transit insurance
surveying charges
installation
T/F direct materials, direct labor and overhead are capitalized to PPE?
True
T/F construction period interest incurred during construction period is capitalized to PPE?
True
T/F construction period interest before or after commencement are expensed to PPE?
True
how to calculate weighted average accumulated expenditure?
total cost to date + CY cost/2
interest is capitalized to the lower of
weighted average expenditure or actual interest cost
Capitalized or Expensed: expenses that enhance asset or increase useful life
Capitalized
Capitalized or Expensed: expenses that restore asset to original condition
Expensed
T/F betterments that make an asset bigger or better impact accumulated depreciation?
F
T/F betterments that extend useful like impact accumulated depreciation?
T
