Depreciation

TOTAL CAPITAL INVESTMENT The aggregate capital means in start of the unit absolutely the amount of capital ought to be need. It alludes to the capital, which should be close by while beginning the unit. The following table shows the total capital investment in “xyz enterprise”. SR NO. PARTICULARS AMOUNT 1. Land…

1. What is an operating segment? An operating segment is a management-approach-based segment. According to GAAP, an operating segment is a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, including intersegment revenues and expenses; whose operating results are regularly reviewed by the enterprise’s CODM; and for which discrete financial information is available (textbook p. 490). 2. What is a reportable segment according to…

cash flow will no longer include cash outflow on rent, and instead, rental cash flow will be in the financing activities category as “ principal and interest expenses”. 4, the expenses of rent will no longer exist, instead, will be replaced with depreciation and interest expenses. All the 4 changes above are more than likely to bring the impact on the lessees, which in our case is the Bunning warehouse, Bunning warehouse has to expense the theoretical amortisation and financing cost, and this…

The accounting standards guide the accounting and reporting of a company’s revenues, expenses, assets, and liabilities. In the accounting of non-financial assets under the Generally Accepted Accounting Principles (GAAP) and International Reporting Financial Standards (IFRS), there are perceived similarities and significant differences with far reaching implications in the accounting practice. Consequently, the Financial Accounting Standards Board (FASB) and the International Accounting Standards…

What is the basis for the land transferred to XYZ Corporation by Mr. Smith? Conclusion. The basis for Mr. Smith is the cost of the land as separated from the gas station and is likely based on property tax evaluations as previously determined for depreciation of gas station assets. XYZ Corporation will have a basis in the land equal to that of Mr. Smith’s basis until such time as remediation is completed. Once remediated the land will increase in basis in the amount of non-depreciable cost of…

Question 2 a) Accrual and Prudence Firstly, one of the accounting concepts is accrual concept. According to defined accrual concept is recognizes the time lag between sales and purchases on one hand, and collection and payment of cash on the other (BusinessDictionary.com, 2014). Accruals Concept of accounting which requires that income and expense must be recognized in the accounting periods to which they relate rather than on cash basis. An exception to this general rule is the cash flow…

Waste Management Inc. is an american waste management and environmental company based in Houston Texas. First founded in 1968 when the likes of Larry Beck, Wayne Huizenga, and Dean Buntrock began purchasing smaller garbage collection services to dominate the industry. Waste Management went public in 1971. Currently Waste Management provides collection, transfer, landfill, waste-to-energy and, recycling services to over 20 million residential households and an additional 2 million corporate…

material defects, design mistakes, manufacturing defects, etc. Normal life failures are normally considered to be random cases of "stress exceeding designed strength" due to abnormal operating conditions. Wear-out is a fact of life due to fatigue or depreciation of materials. After useful life period most of the equipments fails which is normal and acceptable for both the manufacturer and customer. A product's useful life is limited by its endurance design. A product manufacturer must assure…

a result, many companies used the maximum 40 years to minimize the effects of the amortization expenses on the income statements. What is more, management could intentionally inflate the goodwill value in the balance sheet by only taking a few depreciation expenses for each period. Issues arising from the old goodwill treatment could have an adverse effect on shareholders' value, especially those acquisitions driven by managerial ego or other reasons. As a result, investors had no knowledge…

methods to record the value of property. The first method is the cost model; this states that the property is carried at cost less any accumulated depreciation or impairment losses. The second method is the revaluation model. The revaluation model can be used to carry the building at fair value, if it can be measured reliably, less any accumulated depreciation and impairment losses. If the company chooses the revaluation model, IAS 16-39 states that the $10 million increase in value would be…