Plant Property Equipment Flashcards
How do you calculate the new depreciation expense after an asset has been impaired
Lump sum allocation equation
Rules for Depreciating Leasehold Improvements
Steps for Calculating Straight-Line Depreciation
What are the Interest Capitalization Rules for Asset Acquisitions
What is the acquired cost of an equipment purchased with a noninterest bearing note?
What are Double-Declining Balance (DDB) Depreciation Calculation Steps
What are the general rules for impairment and asset restoration for long lived assets
How to Calculate Depreciable Base?
What are the Steps for Capitalizing Land Costs
Where do you report Gains and Losses on the Sale of Depreciable Assets
Depreciating Assets Purchased with a Noninterest-Bearing Note
What are the Rules for Long-Lived Assets Held-for-Sale
When can an impairment loss be restored for long-lived assets, and what limits apply to the restoration?
How to calculate Gain or Loss on Disposal of Depreciable Assets
What are the Steps for Impairment Testing of Fixed Assets
Capitalized and Expensed Interest for Construction Projects
Steps to record depletion expense
Units of production depreciation method
What are the costs to capitalizing Land vs Buildings
What costs should be capitalized to prepare an asset for use?
What are the steps to calculate depletion expense on the income statement
What are the key steps for Capitalizing Interest on Self-Constructed Assets
Capitalized Cost of Equipment with Noninterest-Bearing Note: Key Steps
Costs to capitalize land key rules
Donated Nonmonetary Assets: Key Rules for Nonreciprocal Transfers
When should a company stop capitalizing interest costs on an asset under construction
Once the asset is ready for use, any subsequent interest costs should be expensed.
Expenditures for repairs and maintenance are routine costs to keep the asset in normal working condition are _________
expensed, not capitalized. Oil changes and tire replacements are considered repairs and maintenance because they are expected costs to keep asset in normal working condition.
What are the steps for Calculating Weighted-Average Interest Rate for Capitalized Interest
How is an asset retirement handled under group depreciation, especially if insurance proceeds are received?
How can you determine which depreciation method was used if an asset disposal resulted in a reported loss?
When a company plans to dispose of long-lived assets, how should they be reported on the balance sheet at year-end if they have not been sold yet?
Report long-lived assets that are planned for disposal at the lower of:
Carrying amount or
Fair value less cost to sell
How is an impairment loss measured for a long-lived asset still in use?
Impairment loss = Carrying amount - Fair value (no cost to sell).
Note: Cost to sell is not applicable for assets in use.
What is the composite depreciation method, and how does it differ from other depreciation methods?
What determines the fair value used for impairment assessment if both in-use and in-exchange values are provided?
When assessing fair value, select the higher of the in-use or in-exchange value, regardless of whether the asset is intended to remain in use or be disposed of. The higher value reflects the principle of “highest and best use” for the asset.
What is the appropriate measurement basis for assets classified as “held for sale”?
For assets classified as “held for sale,” measure at the lower of carrying amount or net realizable value (NRV). NRV is calculated as the estimated selling price minus any costs of disposal. Depreciation is no longer applied once an asset is classified as held for sale, but impairment losses are allowed.
How should the cash equivalent cost of an asset be calculated when using a noninterest-bearing note payable, and how is this amount used in depreciation calculations?
How do you calculate Weighted Average Accumulated Expenditures (WAAE) for construction projects, and when do you use monthly fractions like 1/12 versus full-year weighting?
How is depreciation calculated using the Sum-of-the-Years’-Digits method
Classify the following expenditures as Capitalized or Expensed:
Freight charges for goods held for resale
In-transit insurance for goods purchased FOB shipping point
Interest on note payable for goods held for resale
Installation of equipment
Testing of newly purchased equipment
Cost of current-year service contract on equipment
Sum-of-the-Years’ Digits (SYD) Method for an 8-year asset
Journal entry for PPE purchase and bond note
WAIR
Specific Borrowing Method for Avoidable Interest
WAAE?
IF a noninterest bearing note purchased to buy an asset AND THE Assets FV is also provided, use the FV to ___
Depreicate the asset!
FV apparently is the more reliable amount
