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| LO9 – Describe the disclosure requirements for long-lived assets in the notes to the financial statements. |
When long-lived assets are presented on the balance sheet, the notes to the financial statements need to disclose the following:
- details of each class of assets (e.g., land; equipment including separate parts; patents; goodwill)
- measurement basis (usually historical cost)
- type of depreciation and amortization methods used, including estimated useful lives
- cost and accumulated depreciation at the beginning and end of the period, including additions, disposals, and impairment losses
- whether the assets are constructed by the company for its own use (if PPE) or internally developed (if intangible assets).
Examples of appropriate disclosure of long-lived assets were shown in notes 3(d) and 4 of BDCC’s financial statements in Chapter 4.
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