Chapter 4: Fixed Assets Flashcards Preview

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Flashcards in Chapter 4: Fixed Assets Deck (7)
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1

PPE

Property plant and equipment, tangible fixed assets
Reported according to: purchase price + required cost for making the source useful

2

Cost of an asset

Consists of the sum of all costs incurred to make the asset ready to function

3

Lump sum purchases

Companies buy assets as a whole

4

Relative sales value method

Share of an asset at the total market value is used to calculate the cost price for every asset

5

Incurred cost only shown on balance sheet it:

provides added value to the asset
shown on income statement

6

Depreciation

Certain asset decreases in value

7

3 types of depreciation

1. Depreciation - long living assets
2. Amortisation - intangibles
3. Depletion - mineral resources