Chapter 12会计英语.ppt

Non-current Assets Depreciation Methods Disposal of Fixed Assets Intangible Assets Amortization of Intangible Assets Classify non-current assets. Understand depreciation method. Accounting for disposal of fixed asset. Understand the nature of intangible assets . Accounting for the amortization of intangible asset. * * Chapter 12 Non-current Assets and Intangible Assets Outline of Chapter 12 12.1 Non-current Assets Long-term assets are subdivided into three classes: (1) Long-term Investments; ① Accounting for debt securities, ② Accounting for equity securities, ③ Other reporting issues. (2) Tangible assets (with physical substance); ①property, plant and equipment, include: Land, Land improvements, Buildings , Equipment. ②Natural resources such as mineral deposits, oil and gas reserves etc. (3) Intangible assets (without physical substance, provide future benefits through the special rights and privileges they convey. ) Long-term assets apply of the cost principle to measure property, plant and equipment specifically, and to capital assets in general. Cost consists of all expenditures necessary to (1) acquire the asset and (2) make it ready for its intended use. These costs include purchase price, freight costs, and installation costs. Factory Machinery Cash price $50,000 Insurance during shipping 500 Installation and testing 1,000 Cost of factory machinery $51,500 Assuming Smith’s Company purchased this factory machinery for cash, the journal entry to record this acquisition would be : Dr. Machinery 51,500 Cr. Cash 51,500 12.2 Depreciation Methods Straight-line method Initial Cost – Residual value Years of Useful Life = Annual Depreciation Expense Cost of the depreciable asset $ 17,000 Less: Estimated residual value (amount to