intermediateaccountingInvestmentsinNoncurrentOperatingAssetsuAcquisition文件材料.ppt

Bargain Purchase Note that a gain is recognized Valuation of Assets at Current Values In IFRS 16, concerns about permitting upward revaluations of noncurrent operating assets is reflected in the rules laid out: If a company revalues its noncurrent operating assets to fair value, it must do so on a regular basis and must revalue entire classes of assets rather than just picking and choosing certain assets. Downward revaluations are recorded as a loss. Upward revaluations are recorded as a debit to the asset and a credit to a special “revaluation” equity account. Sales Average fixed assets $102,481 Fixed Asset Turnover Ratio Fixed asset turnover ratio = General Electric’s manufacturing segments had sales for 2006 totaled $102,481. Its beginning and ending property, plant, and equipment balances were $16,504 and $12,675, respectively. = $14,590 $14,590 ($16,504 + $12,675) 2 Average fixed assets = = 7.02 Sales Average fixed assets $115,595 Fixed Asset Turnover Ratio Fixed asset turnover ratio = General Electric’s manufacturing segments had sales for 2007 totaled $115,595. Its beginning and ending property, plant, and equipment balances were $12,675 and $14,590, respectively. = $13,409 $13,409 ($12,675 + $14,590) 2 Average fixed assets = = 8.62 Interest Capitalization Interest charges begin when the first expenditures are made on the project and continue until the asset is completed. Interest capitalization is calculated on the average amount of accumulated expenditures. (continues) Interest Capitalization The interest rate to use is the actual rate on the debt incurred specifically for the project. If the construction period covers more than one fiscal period, accumulated expenditures include prior years’ capitalized interest. Interest Capitalization Example Construction will take about 18 months. Construction costs are estimated at $6.4 million. A 12%, $2 million