LO10-01: Identify the various costs included in the initial cost of property, plant, and equipment, natural resources, and intangible assets.
LO10-02: Determine the initial cost of individual property, plant, and equipment and intangible assets acquired as a group for a lump-sum purchase price.
LO10-03: Determine the initial cost of individual property, plant, and equipment and intangible assets acquired in exchange for a deferred payment contract.
LO10-04: Determine the initial cost of individual property, plant, and equipment and intangible assets acquired in exchange for equity securities or through donation.
LO10-05: Calculate the fixed-asset turnover ratio used by analysts to measure how effectively managers use property, plant, and equipment.
LO10-06: Determine the initial cost of individual property, plant, and equipment and intangible assets acquired in exchange for other nonmonetary assets.
LO10-07: Identify the items included in the cost of a self constructed asset and determine the amount of capitalized interest.
LO10-08: Explain the difference in accounting treatment of costs incurred to purchase intangible assets versus the costs incurred to internally develop intangible assets.
This module explains how companies are supposed to account for buying either property, plant, and equipment or intangible assets.
Land
Buildings
Manufacturing equipment (e.g., machines)
Office computers
Cars and trucks
Furniture
The word intangible means "unable to be touched or grasped; not having physical presence."