Long-lived or capital assets are used in the normal operating activities of the business and are expected to provide benefits for a period in excess of one year. Long-lived assets covered in this chapter consist of three types: (a) property, plant, and equipment (PPE); (b) intangible assets; and (c) goodwill. Also discussed are depreciation and amortization, techniques to allocate the cost of most long-lived assets over their estimated useful lives.
Learning Objectives
LO1 – Describe how the cost of property, plant, and equipment (PPE) is determined, and calculate PPE.
LO2 – Explain, calculate, and record depreciation using the units-ofproduction, straight-line, and double-declining balance methods.
LO3 – Explain, calculate, and record depreciation for partial years.
LO4 – Explain, calculate, and record revised depreciation for subsequent capital expenditures.
LO5 – Explain, calculate, and record the impairment of long-lived assets.
LO6 – Account for the derecognition of PPE assets.
LO7 – Explain and record the acquisition and amortization of intangible assets.
LO8 – Explain goodwill and identify where on the balance sheet it is reported.
LO9 – Describe the disclosure requirements for long-lived assets in the notes to the financial statements.
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