Term
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Definition
| An expenditure that is classified as an asset. |
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Term
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Definition
| Property, plant, and equipment. |
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Term
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Definition
| The property the company is using for operations. |
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Term
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Definition
| Offices, stores, storage, manufacturing plants, etc. |
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Term
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Definition
| Machinery, computers, copiers, vehicles, furniture, fixtures, etc. |
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Term
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Definition
| Parking lots, sidewalks,fences, landscaping, etc.... and should be kept separate from land account. |
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Term
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Definition
| Purchasing land, building, and or equipment in a single purchase. |
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Term
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Definition
| Cost to buy, setup, and cost to place the asset in service. Includes legal fees. **DOES NOT INCLUDE INTEREST.** |
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Term
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Definition
| Satisfies the matching principle and is the only time interest is included in the acquisition cost. |
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Term
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Definition
| Oil, natural gas, timber, etc. |
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Term
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Definition
| Patents, copyrights, trademarks, franchises, goodwill. |
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Term
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Definition
| Recognized when a company purchases another business for more than the fair value of the net assets acquired. |
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Term
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Definition
| Expenditures that simply maintain a given level of service from the asset. Only benefits the current accounting period. |
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Term
| Expenditure to Capitalize |
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Definition
| The cost is now treated as an asset and the costs are incurred to achieve greater future benefits. Increases assets life, makes the asset more efficient, or increases assets capacity. |
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Term
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Definition
| If amount is small it will be expensed. |
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Term
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Definition
| Long term assets used in operations that will be depreciated, depleted, or amortized. |
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Term
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Definition
| The amount of coast you have not depreciated away yet. |
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Term
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Definition
| Cost - Accumulated depreciation |
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Term
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Definition
| How much they think it'll be with when the company is done using it. |
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Term
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Definition
| Is the amount of the assets cost that is expected to be used up to generate revenue over its life. |
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Term
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Definition
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Term
| Straight Line Depreciation Expense |
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Definition
Cost - Residual Value
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Life in Year |
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Term
| Declining Balance Depreciation Rate |
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Definition
Declining Rate (in decimal)
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Life in Years |
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Term
| Activity Based (Units of Production) |
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Definition
Cost - Residual Value
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Life in Units of Production |
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