Chapter 9: Long-Lived Tangible and Intangible Assets

These flashcards cover key terms and concepts related to long-lived tangible and intangible assets, as presented in the lecture notes.

Long-lived assets

Business assets acquired for use over one or more years, not intended for resale.

Capitalizing costs

Recording costs as assets rather than expenses.

Acquisition cost

Includes purchase price and all reasonable expenditures to prepare the asset for its intended use.

Basket purchase

Purchasing multiple assets for one price, with costs allocated based on their relative market values.

Depreciation

Cost allocation process matching costs of operational assets with periods benefited by their use.

Accumulated Depreciation

Contra asset that reduces Property, Plant & Equipment assets, resulting in net book value.

Impairment

The process of determining if an asset's book value should be reduced to its fair market value due to decreased remaining value.

Intangible Assets

Assets that lack physical substance, representing exclusive rights that provide benefits to the owner.

Goodwill

Occurs when the purchase price of a company exceeds the fair market value of its net tangible assets.

Fixed Asset Turnover

Ratio measuring the sales dollars generated by each dollar invested in fixed assets.