3.8 Long-Lived Assets

cost and expenditures

for PP&E, you record it at _____ on the balance sheet and include any ______________ used to prepare it for use

fair values

if PP&E is traded/exchanged, you report the difference in the ____________________ as a gain or loss

capitalized

if PP&E is being constructed, the borrowing costs are _______________

for sale

if PP&E being constructed is for sale/for own use, it is capitalized as part of inventory and then later on expensed under COGS

capitalizations

do expenses or capitalizations go on the balance sheet?

intangible

goods that are identifiable, under company control, expected to generate future income, have measurable costs and aren’t physical objects are __________

individually

when purchased individually/as part of a company, intangibles are treated the same as PP&E

GAAP

when intangibles are bought as part of a company, does IFRS or GAAP allow them to be treated separately from the rest of the company?

incurred

when internally developed, intangibles’ costs are expensed when ___________

expensed and capitalized

under IFRS, when intangibles are internally developed, research costs are _________ and development costs are _________________

expensed and expensed and capitalized

under GAAP, when intangibles are internally developed, research costs are _________ , development costs are _________________ and development costs are _________________

increase

do capitalizations initially increase/decrease assets, operating cash flow and profits?

investing

capitalized interest is a _______________ outflow under IFRS

operating

capitalized interest is a ___________ outflow under GAAP

operating

expensed interest is a _______________ outflow under IFRS

operating

expensed interest is a _______________ outflow under GAAP

IFRS

is the depreciation revaluation model allowed under GAAP or IFRS?

(acquisition cost - salvage value) / years of useful life

straight line depreciation formula

\[(1 / useful life) 2\] \* cost

double declining balance depreciation formula

cost \* (production in period / total estimated production over useful life)

units of production depreciation formula

impairment

unanticipated decrease in asset value causing carrying amount > recoverable amount

GAAP

does GAAP or IFRS not allow write-down reversals?

finite

along with PP&E are finite/infinite intangibles not regularly tested for impairments?

sale and proceeds

if an asset is abandoned, use the same accounting as for a _________ but without recording cash ____________

accumulated depreciation / depreciation expense

average asset age =

net PP&E / depreciation expense

estimated remaining asset life =

estimated total life, depreciation expense, accumulated depreciation, net PP&E

= estimated equipment age + estimated remaining life = historical cost / annual _________ = __(______________ / depreciation expense) + __(________________ / depreciation expense)