Depreciation has been an encompassing part of accounting and cash flow assumptions are a main part of the financial statement. The periodic inventory system is a something to consider with recording inventory and reducing waste. Another topic to bring to light is goodwill and intangible assets for health care organizations. There are various ways for depreciation to be measured and determined based off the organizations finances. Much can be said about depreciation, intangible assets, and valuing goodwill. How all these aspects relate within the health care organization have a considerable impact on the financial statement and organization.
Depreciating Assets
In health care organizations, the way to depreciate assets over their useful lives instead expensing them over the year they are acquired is justifiable. When an asset is depreciated overall a period longer or shorter, than its useful life there is no obtainable accurate match between revenues and expenses. It then turns out for accountant’s who use (GAAP) estimate a shorter useful life. An estimated useful life of equipment lasts a good amount of time. Nevertheless, the writing off an asset too …show more content…
For-profit organizations have tangible or intangible assets, and not-for profit organizations accumulate goodwill. According to (Heuer & Travers, 2011), assets are not recognized as tangible assets such as land and buildings, but intangible are known as patents, intellectual property, and brand names. In addition to, incomplete agreements and licenses are part of the intangible assets. Not-for profit organizations record any intangible or goodwill items as part of their transaction. In 2010, the ASC 350 has a new process to test the impairment of goodwill and some intangible assets in not-for-profit organizations to see their fair values. Fair value is viewed as the market price for an
Depreciating Assets
In health care organizations, the way to depreciate assets over their useful lives instead expensing them over the year they are acquired is justifiable. When an asset is depreciated overall a period longer or shorter, than its useful life there is no obtainable accurate match between revenues and expenses. It then turns out for accountant’s who use (GAAP) estimate a shorter useful life. An estimated useful life of equipment lasts a good amount of time. Nevertheless, the writing off an asset too …show more content…
For-profit organizations have tangible or intangible assets, and not-for profit organizations accumulate goodwill. According to (Heuer & Travers, 2011), assets are not recognized as tangible assets such as land and buildings, but intangible are known as patents, intellectual property, and brand names. In addition to, incomplete agreements and licenses are part of the intangible assets. Not-for profit organizations record any intangible or goodwill items as part of their transaction. In 2010, the ASC 350 has a new process to test the impairment of goodwill and some intangible assets in not-for-profit organizations to see their fair values. Fair value is viewed as the market price for an