Long term asset is reported in the carrying value or book value (cost minus accumulated depreciation)
Property, plant & equipment (PP&E)
· used in the production or sale of other assets
· distingish them from prepaid expense
· not held to sold (unlike inventory)
· longer useful life than current asset
Cost of plant
· The cost that was made prior and necessary for placing the asset in services
· Include transportation, installment cost, initial time cost, broker cost, legal fee for title transfer
· For constructing plant, also include capitalized cost e.g. material, labour, interest, reasonable amt of overhead, architectual fee.
Cost of land
· Include search cost, real estate commission, title transfer, back property tax, surveying, landscaping
Cost of intangible assets
· Allocated as prescribed by law
· Subject to amortization not exceeding 40 years and based on SL method
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