PPE-Capitalized Costs Flashcards
1
Q
If expenditure is immaterial, how do we typically account for it?
A
-Expense it
2
Q
What are the two components of the acquisition cost of PPE?
A
- Negotiated acquisition cost
- Get ready costs
3
Q
How do we treat interest on purchase of plant assets? Interest during construction of buildings?
A
- Expense
- Capitalize
4
Q
What are the criterion for capitalizing post acquisition costs?
A
-Increase useful life
or
-Increase productivity or efficiency including cost reduction
