Lesson 8 Property Plant & Equipment Flashcards
When are Long lived assets to be tested for impairment?
As a result of a triggering event
Circumstances indicating that the carrying value of the asset may not be recoverable
We bought new machinery!
What is the proper accounting treatment of freight and interest cost?
The freight cost should be capitalized & the interest should be expensed
Accretion Expense for ARO is recorded at?
The credit adjusted risk free rate x FV of ARO
Formula for determining Units-of-production method depreciation expense ?
Multiple depreciable base X the ratio of Years units to total estimated units
Cost -salvage value = depreciation base
How to figure how a gain is reported in the IS that lacks commercial substance?
Determine what we are receiving
Cash + market value of new asset= total received
Total received - BV of my asset given up= gain
Gain X % (proportion of the cash received)
