Fixed Asset Accounting

Size: px

Start display at page:

Download "Fixed Asset Accounting"

Magdalen Hardy
6 years ago
Views:

1 Fixed Asset Accounting 4 th Edition Steven M. Bragg

2 Chapter 1 Introduction to Fixed Assets... 1 Learning Objectives... 1 Introduction... 1 What are Fixed Assets?... 1 The Fixed Asset Designation... 2 Fixed Asset Classifications... 2 Applicable Accounting Frameworks... 3 Accounting for Fixed Assets... 4 Accounting for Intangible Assets... 4 Accounting for Not-for-Profit Fixed Assets... 5 Fixed Asset Disclosures... 5 Fixed Asset Controls... 5 Fixed Asset Policies and Procedures... 5 Fixed Asset Record Keeping... 6 Fixed Asset Auditing... 6 Fixed Asset Measurements... 6 Chapter Summary... 7 Review Questions... 8 Review Answers... 9 Chapter 2 Capital Budgeting Analysis Learning Objectives Introduction Overview of Capital Budgeting Bottleneck Analysis Net Present Value Analysis The Payback Method Discounted Payback Capital Budget Proposal Analysis The Outsourcing Decision The Capital Budgeting Application Form The Post Installation Review The Lease or Buy Decision Leasing Concerns Leasing Advantages Capital Budgeting with Little Cash Chapter Summary Review Questions Review Answers Chapter 3 Initial Fixed Asset Recognition Learning Objectives Introduction The Capitalization Limit The Base Unit GAAP: The Initial Measurement of a Fixed Asset Patent Measurement Interpretive Commentary GAAP: The Measurement of Assets Acquired in a Business Combination GAAP: The Measurement of Assets Acquired in a Finance Lease GAAP: Non-Monetary Exchanges GAAP: Internal-Use Software GAAP: Website Development Costs IFRS: Initial Inclusions in a Fixed Asset... 37

3 IFRS: Initial Cost of a Fixed Asset IFRS: The Measurement of Assets Acquired in a Business Combination IFRS: The Measurement of Assets Acquired in a Finance Lease IFRS: Non-Monetary Exchanges IFRS: Website Development Costs IFRS: Internally Developed Intangible Assets Chapter Summary Review Questions Review Answers Chapter 4 Interest Capitalization Learning Objectives Introduction Why and When Do We Capitalize Interest? Assets for Which Interest Must Be Capitalized Assets for Which Interest Capitalization is Not Allowed The Interest Capitalization Period The Capitalization Rate Calculating Interest Capitalization Derecognizing Capitalized Interest Interest Capitalization under IFRS Chapter Summary Review Questions Review Answers Chapter 5 Asset Retirement Obligations Learning Objectives Introduction The Liability for an Asset Retirement Obligation The Initial Measurement of an Asset Retirement Obligation Subsequent Measurement of an Asset Retirement Obligation Settlement of an Asset Retirement Obligation Overview of Environmental Obligations Measurement of Environmental Obligations Measurement of Environmental Obligations Recoveries Related to Environmental Obligations Asset Retirement Obligations under IFRS Chapter Summary Review Questions Review Answers Chapter 6 Depreciation and Amortization Learning Objectives Introduction The Purpose of Depreciation Depreciation Concepts Accelerated Depreciation Straight-Line Method Sum-of-the-Years Digits Method Double-Declining Balance Method Depletion Method Units of Production Method MACRS Depreciation The Depreciation of Land The Depreciation of Land Improvements Group Depreciation Composite Depreciation ii

4 Depreciation Accounting Entries Accumulated Depreciation Depreciation Under IFRS Other Depreciation Topics Impact on Cash Flow Analysis Depreciation and Market Value Chapter Summary Review Questions Review Answers Chapter 7 Subsequent Fixed Asset Measurement Learning Objectives Introduction The Capitalization of Additional Expenditures Asset Revaluation for Tangible Assets Asset Revaluation for Intangible Assets Chapter Summary Review Questions Review Answers Chapter 8 Fixed Asset Impairment Learning Objectives Introduction Asset Impairment Under GAAP GAAP: Measurement of Asset Impairment GAAP: Impairment Testing Exemption for Intangible Assets GAAP: The Impact of Asset Retirement Obligations GAAP: Measurement of Disposal Losses on Assets Held for Sale GAAP: The Asset to be Tested GAAP: Timing of the Impairment Test GAAP: Accounting for the Impairment of an Asset Group GAAP: Reversing an Impairment Loss GAAP: Reversing a Disposal Loss Asset Impairment Under IFRS IFRS: The Impairment Test IFRS: The Asset to be Tested IFRS: Goodwill and Impairment Testing IFRS: Corporate Assets and Impairment Testing IFRS: Timing of the Impairment Test IFRS: Indications of Impairment IFRS: Intangible Asset Measurement IFRS: Determining Value in Use IFRS: Determining the Fair Value less Costs to Sell IFRS: Accounting for the Impairment of an Asset IFRS: Accounting for the Impairment of a Cash-Generating Unit IFRS: Reversing an Impairment Loss Chapter Summary Review Questions Review Answers Chapter 9 Fixed Asset Disposal Learning Objectives Introduction Asset Derecognition The Held-for-Sale Classification Reclassification from Held for Sale Discontinued Operations iii

5 Abandoned Assets Idle Assets Asset Disposal Accounting Asset Disposal under IFRS Chapter Summary Review Questions Review Answers Chapter 10 Fixed Asset Disclosures Learning Objectives Introduction GAAP Disclosures GAAP: General Fixed Asset Disclosures GAAP: Asset Retirement Obligations GAAP: Capitalized Interest Disclosures GAAP: Change in Estimate Disclosures GAAP: Intangible Asset Impairment Disclosures GAAP: Intangible Asset Disclosures IFRS Disclosures IFRS: General Fixed Asset Disclosures IFRS: Capitalized Interest Disclosures IFRS: Change in Estimate Disclosures IFRS: Estimates of Recoverable Amounts IFRS: Held for Sale Disclosures IFRS: Impairment Disclosures IFRS: Intangible Asset Disclosures IFRS: Revaluation Disclosures IFRS: Optional Disclosures Chapter Summary Review Questions Review Answers Chapter 11 Not-for-Profit Fixed Asset Accounting Learning Objectives Introduction Initial Recognition of Fixed Assets Restrictions on Contributed Assets Valuation of Contributed Assets Valuation of Contributed Services Valuation of Art, Historical Treasures, and Similar Items Depreciation of Fixed Assets Recordation of Fixed Assets Fixed Asset Controls in a Not-for-Profit Entity Chapter Summary Review Questions Review Answers Chapter 12 Fixed Asset Record Keeping Learning Objectives Introduction Fixed Asset Accounts Construction Project Record Keeping Building Record Keeping Equipment Record Keeping Land Record Keeping Lease Record Keeping Operating Lease Record Keeping iv

6 Finance Lease Record Keeping Document Retention Fixed Asset Reports Depreciation Report Audit Report Responsibility Report Asset Replacement Report Maintenance Report Chapter Summary Review Questions Review Answers Chapter 13 Fixed Asset Controls Learning Objectives Introduction Controls for Fixed Asset Acquisition Controls for Fixed Asset Construction Controls for Fixed Asset Theft Controls for Fixed Asset Valuation Controls for Fixed Asset Depreciation Controls for Fixed Asset Disposal The Control of Laptop Computers Chapter Summary Review Questions Review Answers Chapter 14 Fixed Asset Policies and Procedures Learning Objectives Introduction Capital Budgeting Policies and Procedures The Capital Request Form Asset Recognition Procedures Asset Revaluation Policies and Procedures Asset Exchange Policies and Procedures Depreciation Policies and Procedures Impairment Policies and Procedures Asset Retirement Obligation Policies and Procedures Intangible Asset Policies and Procedures Transfer Policies Disposal Policies and Procedures The Asset Disposal Form Record Keeping Policies Tracking Policies and Procedures The Fixed Asset Manual Chapter Summary Review Questions Review Answers Chapter 15 Fixed Asset Tracking Learning Objectives Introduction Tag Tracking Bar Code Tracking RFID Tracking Active Transmission RFID Tracking Passive Transmission Wireless Monitoring Chapter Summary v

7 Review Questions Review Answers Chapter 16 Fixed Asset Measurements Learning Objectives Introduction Sales to Fixed Assets Ratio Repairs and Maintenance Expense to Fixed Assets Ratio Accumulated Depreciation to Fixed Assets Ratio Cash Flow to Fixed Asset Requirements Ratio Return on Assets Employed Return on Operating Assets Bottleneck Utilization Unscheduled Machine Downtime Chapter Summary Review Questions Review Answers Chapter 17 Fixed Asset Auditing Learning Objectives Introduction Fixed Asset Audit Objectives Fixed Asset Audit Procedures Auditor Requests Chapter Summary Review Questions Review Answers Appendix Journal Entries Glossary Index vi

Fixed Asset Accounting

Fixed Asset Accounting The Comprehensive Guide Steven M. Bragg Table of Contents Chapter 1 - Introduction to Fixed Assets 2 What are Fixed Assets? 2 The Fixed Asset Designation 3 Fixed Asset Classifications