Depreciation Flashcards
Cost of Building
Architect fee
+ Construction cost of Building
Cost of Land
Purchase price + Delinquent Taxes on property - Demolition of existing building - Proceeds from sale of scrap materials
The composite depreciation method _________
does not recognize gain or loss on the retirement of single assets in the group. (A> composite method is generally used for collection of somewhat dissimilar assets with different lives. B>The group method usually refers to a collection of similar assets with approx the same useful lives. C>Accelerated or SL methods can be used with the composite method.
Donated non-monetary assets are recorded at the ____________
FV of the asset received
If Sum of undiscounted cash flows is less than the CV, then calculate Impairment
Impairment = CV-FV
FIFO follows LCNRV
Lower of Cost or NRV
Recording price of Land
County assessment for sewer lines + Title search fees + Cash paid for land with a building to be demolished + Removal of old building less salvage
(NOT TO BE CONSIDERED: Excavation for construction of basement)
Special revenue fund
It is used to account for specific revenues (e.g. gas tax for road maintenance) that come from earmarked sources and are restricted to financing designated activities. Both the principal and interest can be used for those activities.
When is company required to evaluate the asset for impairment?
When events or circumstances indicate the CV might not be recoverable.
Cost of Land
Purchase Price
+ Delinquent Taxes
+Surveying
+ Clearing, grading, landscaping
+ Costs of razing existing building on land
(- )Proceeds from the sale of scrap materials
When a firm is in liquidation, historical cost and entry values (replacement cost) are no longer relevant. The firm is no longer a going concern. The only amounts relevant are the amounts to be received on sale of the assets. NRV is the net value to be received, after the costs of getting the asset ready for sale are deducted.
NRV to be considered when firm is in liquidation (Balance Sheet)
Undiscounted cash flow < CV : Calculate Impairment
Impairment = CV - FV
Interest during construction period only can be _______
CAPITALIZED
New Truck (FMV) XXX
Accumulated Dep (AD) XXX
Old Truck XXX
Gain XXX
Cash paid to dealer XXX
Like-kind exchange
Double declining balance does not consider Salvage Value
True
