When describing the nature of property, plant and equipment, what specific costs are included (and excluded) in the cost of land, buildings and equipment? How do we account for rearrangement and reinstallation costs? How do we value lump-sum purchases?

After the acquisition of tangible assets (e.g., capital equipment used in the trade or business), organizations incur costs that may be characterized as capital or revenue expenditures. What is the difference and how are they accounted for?

What are the methods are used to recognize the expense of consuming (i.e., depreciation) an asset? What financial statement is depreciation recorded? How do we determine impairment? How do we know if the asset is impaired?

How are costs accounted for during construction? In other words, what specific costs (e.g., interest) are capitalized? What is the significance of weighted-average accumulated expenditures.

How are assets disposed of? What are the journal entries to remove them from the books at either a gain or loss?

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1 Specific costs included in the cost of land buildings and equipment Cost of land Purchase price closing costs title fees legal fees and any other co... View the full answer