会计英语（简明版） Lesson 7 Long-term Assets.ppt

YESUNAccountingEnglish 2009 1 Lesson7 Long termAssets YESUNAccountingEnglish 2009 2 Typeoflong termassets InvestmentPP ENaturalresourcesIntangibleassetsOtherassets YESUNAccountingEnglish 2009 3 Investmentsindebtsecurities YESUNAccountingEnglish 2009 4 DebtSecurities TypesandReportedAmounts DebtInstrumentsrepresentingaCREDITORrelationship YESUNAccountingEnglish 2009 5 TradingSecurities Tradingsecuritiesareusedtogenerateprofitsfromshorttermdifferencesinprices Theholdingperiodisusuallylessthan3monthsThesecuritiesarereportedatfairvalueUnrealizedgainsandlossesarereportedaspartofnetincomeAnydiscountorpremiumisnotamortized YESUNAccountingEnglish 2009 6 Available for SaleDebtSecurities Theseinvestmentsarereportedatfairvalueinthebalancesheet Differencesbetweenthefairvalueandamortizedcostarereportedasunrealizedholdinggainsandlosses partofequity Whenrealized gainsandlossesinfairvaluearereportedaspartofnetincome YESUNAccountingEnglish 2009 7 Held to MaturityDebtSecurities Theoperatingentityhasboth apositiveintenttoholdthesecurities andtheabilitytoholdthemtomaturityThesesecuritiesareaccountedforatamortizedcost notfairvalue YESUNAccountingEnglish 2009 8 InvestmentsinDebtSecurities Example Investmentindebtsecurity Issueatadiscount Costtoinvestingentity 924 183Parvalue 1 000 000Discount 75 817Effectiverateofinterest 10 Stated contractual rate 8 Fairvalueofsecurity Endofyear1 1 000 000Endofyear2 975 000Computegainsorlossesforthethreetypesofdebtsecurities YESUNAccountingEnglish 2009 9 InvestmentsinDebtSecurities Example YESUNAccountingEnglish 2009 10 InvestmentsinDebtSecurities TradingSecurity Computegain FMVlessAcquisitioncost 1 000 000less 924 183 75 817 SecuritiesFairValue Trading 75 817UnrealizedHoldingGainorLoss Income75 817 YESUNAccountingEnglish 2009 11 DeterminingUnrealizedgainorloss FMVendofyear1 1 000 000Amortizedcostendofyear1 936 601Unrealizedgain year1 63 399 SecuritiesFairValueAdjustment63 399UnrealizedHoldingGainorLoss63 399 InvestmentsinDebtSecurities Available for SaleSecurity year1 YESUNAccountingEnglish 2009 12 DeterminingUnrealizedgainorloss FMVendofyear2 975 000Amortizedcostendofyear2 950 262Unrealizedgain year2 24 738 UnrealizedHoldingGainorLoss38661SecuritiesFairValueAdjustment38661 InvestmentsinDebtSecurities Available for SaleSecurity year2 Unreal g L Endofyear1 63 399creditEndofyear2 24 738creditReverse 38661debit YESUNAccountingEnglish 2009 13 InvestmentsinDebtSecurities Held to MaturitySecurity Noentryisneededforfairvalueadjustment FairvaluechangesarenotrecognizedatbalancesheetdateShowsecurityatamortizedcost YESUNAccountingEnglish 2009 14 Investmentinequitysecurities YESUNAccountingEnglish 2009 15 EquitySecurities Equitysecuritiesrepresentownershipinterestssuchascommon preferred orothercapitalstock TheyincluderightstobuyandselltheownershipinterestsConvertibledebtandredeemablepreferredstockarenotequitysecuritiesforthispurposeTheextentofownershipincommonstockbyaninvestorinaninvesteedeterminestheaccountingtreatmentforequitysecurities YESUNAccountingEnglish 2009 16 InvestmentsinEquityInterests Control 0 20 50 100 OwnershipPercentage LittleSignificantCONTROLornone LevelofInfluence YESUNAccountingEnglish 2009 17 InvestmentinEquitySecurities AvailableforSaleSecurities SecuritieswhenacquiredarerecordedatcostSubsequenttoacquisition theinvestmentsarevaluedandreportedatfairvalueInvestordoesnotrecognizeitsproportionateshareofinvestee snetincome unlessdividendsaredeclaredbyinvestee Unrealizedholdinggainsandlossesarereportedas partofcomprehensiveincome andacomponentofstockholders equity YESUNAccountingEnglish 2009 18 Whenmarketvaluenotavailable usecostmethod 1 Underthecostmethod anequitysecurityinvestmentiscarriedatitsacquisitioncost includingbrokeragefeesandotherincidentalcosts 2 Underthecostmethod dividendsreceivedfrominvesteearerecognizedasrevenuewhenitwasdeclared YESUNAccountingEnglish 2009 19 Costmethod 3 Underthecostmethod theinvestmentaccountmustbereducediftheinvestorreceivesdividendsinexcessoftheinvestor spercentageshareofearnings Sincetheamountofinvestmentincomerecognizedbytheinvestingenterpriseshouldbelimitedtotheamountdistributedoutofaccumulatednetprofitsoftheinvesteeenterprisethataroseaftertheinvestmentwasmade YESUNAccountingEnglish 2009 20 Costmethod 4 Whenaninvestorownslessthan20 ofthecommonstockofanothercorporation itispresumedthattheinvestorhasrelativelylittleinfluenceontheinvestee Asaresult netincomeearnedbytheinvesteeisnotconsideredaproperbasisforrecognizingincomefromtheinvestmentbytheinvestor Thereasonisthattheinvesteemaychoosetoretainforuseinthebusinessincreasednetassetsresultingfromprofitableoperations Therefore netincomeisnotconsideredearnedbytheinvestoruntilcashdividendsaredeclaredbytheinvestee YESUNAccountingEnglish 2009 21 InvestmentsinEquitySecurities EquityMethod AsubstantiveeconomicrelationshipisacknowledgedbetweentheinvestorandtheinvesteeTheinvestment scarryingvalueisincreasedbyinvestor sproportionateshareofearningsTheinvestment scarryingvalueisdecreasedby investor sproportionateshareoflossesdividendsreceivedbyinvestee YESUNAccountingEnglish 2009 22 InvestmentsinEquitySecurities Consolidation Avotinginterestofmorethan50 resultsinacontrollinginterestTheinvestoristheparentcorporation theinvesteeisthesubsidiarycorporation TheinvestorpreparesconsolidatedfinancialstatementsfortheparentandthesubsidiaryTheinvestoraccountsfortheinvestmentonitsbooksbyfairvalueorcostmethodintheindividualfinancialstatements YESUNAccountingEnglish 2009 23 InvestmentsinEquitySecurities Summary YESUNAccountingEnglish 2009 24 EquitySecurities AccountingbyCategory CategoryValuationUnrealizedHoldingOtherIncomeGainsandLossesEffects 20 FairvalueOtherincomeandDividendsandAvailforsaleEquityG L sale 20 FairvalueNetincomeDividends TradingG L sale 20 EquityNotrecognizedProportionate50 investee sinc 50 ConsolidateNotrecognizedNotapplicable YESUNAccountingEnglish 2009 25 Property Plant andEquipment PP E PP Einclude land building structuresandequipmentmachinery furnitureandtoolsTheyarenotheldforresaleTheyarelongtermandaresubjecttodepreciation exceptland Theyaretangible YESUNAccountingEnglish 2009 26 AcquisitionCost HistoricalcostisthebasisfordeterminingcostHistoricalcostincludes theasset scashorcashequivalentprice andthecostofreadyingtheassetforuseCostsincurredafteracquisitionare addedtoasset scost iftheyprovidefutureservicepotential orexpensed iftheydonotaddtoservicepotential YESUNAccountingEnglish 2009 27 CostssubsequenttoAcquisition Ifcostincurredincreasefuturebenefits capitalizecostsIfcostsmaintainagivenlevelofservices expensecostsCostsincurredafteracquisitioncanbe additionsimprovementsandreplacementsrearrangementsandreinstallationrepairs YESUNAccountingEnglish 2009 28 Acquisitionthroughleasing CapitalleaseOperatingleaseisoff balancesheetfinancing YESUNAccountingEnglish 2009 29 Exchangeofnonmonetaryexchange Thebasicruleisthattheexchangemustbebasedon thefairvalueoftheassetgivenup orthefairvalueoftheassetreceivedwhicheverisclearlymoreevident Therulesforgain lossrecognitiondependuponwhethertheassetsexchangedare nonmonetaryormonetary YESUNAccountingEnglish 2009 30 Exchangeexample AmbercompanyexchangesanumberoftrucksforlandfromBecktelcompany Fairvalueoftrucks 49 000 Bookvalueoftrucks 42 000 Cost 64 000 Accu Depr 22 000 CashpaidtoBecktel 17 000RecordthepurchaseinAmber sbooks YESUNAccountingEnglish 2009 31 Amber Becktel Amberrecognizesgain FMVlessBookvalue 7 000 YESUNAccountingEnglish 2009 32 LandDr 66 000Accu Dep Trucks Dr 22 000Trucks 64 000Cash 17 000Gainondisposal 7 000 YESUNAccountingEnglish 2009 33 Depreciation Concept Depreciationisameansofcostallocation Itisnotamethodofvaluation Depreciationinvolves allocatingthecostoftangibleassetstoexpenseinasystematicandrationalmannertoperiodsexpectedtobenefitfromuseofassets YESUNAccountingEnglish 2009 34 FactorsintheDepreciationProcess Questionstobeanswered Whatisthedepreciablebaseoftheasset Whatistheasset susefullife Whatmethodofcostapportionmentisbestfortheassetinquestion YESUNAccountingEnglish 2009 35 DepreciableBase Depreciablebaseistheamountsubjecttodepreciation Itisdeterminedas OriginalcostoftheassetlessEstimatedsalvageordisposalvalue YESUNAccountingEnglish 2009 36 EstimatedServiceLives Anasset sservicelifeandphysicallifearenotthesame Assetsareretired fromproductivelife dueto physicalfactors suchascasualty oreconomicfactors suchasobsolescence EconomicfactorsinturnincludeInadequacy assetcannotmeetcurrentdemand Supercession byabetterasset Obsolescence otherfactors YESUNAccountingEnglish 2009 37 DepreciationMethods Depreciationmethodscanbeclassifiedasfollows FinancialaccountingDepreciationmethodsFinancialaccountingmethodsare straight lineacceleratedmethods or YESUNAccountingEnglish 2009 38 DepreciationMethods Overview DepreciationMethods YESUNAccountingEnglish 2009 39 DepreciationMethods Example AmbercorporationbuysatruckonJanuary1 2000 Informationrelatingtothetruckisasfollows Cost 34 000Estimatedservicelife 5years or60 000miles Salvagevalueendoffiveyearsoruse 4 000Actualmilesdriven 20 000miles in2000 15 000miles in2001 YESUNAccountingEnglish 2009 40 Straight linemethod 1 Depreciablebase 34 000less 4 000 30 000 2 Annualdepreciation 30 000 5years 6 000 3 DepreciationSchedule years1and2 YearBookDepreciationAccumulatedBookvalue beg Depreciationendofyear1 34 000 6 000 6 000 28 0002 28 000 6 000 12 000 22 000 YESUNAccountingEnglish 2009 41 Activitymethod unit mile 1 Depreciablebase 34 000less 4 000 30 000 2 Depreciationpermile 30 000 60 000 0 50 4 DepreciationSchedule years1and2 YearBookDepreciationAccumulatedBookvalue beg Depreciationendofyear1 34 000 10 000 10 000 24 0002 24 000 7 500 17 500 16 500 3 Depreciation 2000 0 50 20 000miles 10 000 YESUNAccountingEnglish 2009 42 Sum of the years digits SYD method 1 Depreciablebase 34 000less 4 000 30 000 2 SYDfraction 1 2 3 4 5 15 3 Depreciation 2000 30 000 5 15 10 000Depreciation 2001 30 000 4 15 8 000Depreciation 2002 30 000 3 15 6 000Depreciation 2003 30 000 2 15 4 000Depreciation 2004 30 000 1 15 2 000 YESUNAccountingEnglish 2009 43 Sum of the years digits SYD method 4 DepreciationScheduleYearBookDepreciationAccumulatedBookvalue beg Depreciationendofyear1 34 000 10 000 10 000 24 0002 24 000 8 000 18 000 16 0003 16 000 6 000 24 000 10 0004 10 000 4 000 28 000 6 0005 6 000 2 000 30 000 4 000 YESUNAccountingEnglish 2009 44 DoubleDecliningbalancemethod 1 Rateofdepreciation 2 1 5 0 40 2 Depreciation 2000 34 000 0 40 13 600Depreciation 2001 20 400 0 40 8 160Depreciation 2002 12 240 0 40 4 896Depreciation 2003 3 344 2 1 672Depreciation 2004 3 344 2 1 672 Totaldepreciationtaken 30 000 YESUNAccountingEnglish 2009 45 Doubledecliningbalancemethod 3 DepreciationScheduleYearBookDepreciationAccumulatedBookvalue beg Depreciationendofyear1 34 000 13 600 13 600 20 4002 20 400 8 160 21 760 12 2403 12 240 4 896 26 656 7 3444 7 344 1 672 28 328 5 6725 5 672 1 672 30 000 4 000 YESUNAccountingEnglish 2009 46 RevisionofDepreciationEstimates Determinationofdepreciationinvolvesinitialestimates life salvagevalue Whentheseestimatesarerevised were computedepreciation ThesereviseddepreciationexpensesapplyprospectivelytotheremaininglifeofassetThesechangesdonotaffectpriorperiods YESUNAccountingEnglish 2009 47 RevisionofDepreciationEstimates Example AmbercorporationbuysadepreciableassetonJanuary1 2000for 95 000 Estimatedlifewas20years Estimatedsalvagevaluewas 5 000 OnJanuary1 2006 estimateswererevisedasfollows salvagevalue 2 000estimatedlife 24years years2000through2023 Determinedepreciationfor2006basedonstraightlinemethodofdepreciation YESUNAccountingEnglish 2009 48 RevisionofDepreciationEstimates Example Accumulateddepreciationtodateofrevisionofestimates 95 000 5 000 20years 4 500dep 4 500 6years 27 000accumulateddepr Amounttobedepreciated years2006through2023 18years 95 000 27 000 2 000 18years 3 667 rounded annualdepreciation YESUNAccountingEnglish 2009 49 DispositionsofPP E Plantassetsmaybe retiredvoluntarily ordisposedofbysale exchange involuntaryconversionDepreciationisrecordeduptothedateofdisposalbeforedetermininggainorlossGainsorlossesfrominvoluntaryconversionareoftenreportedasgainorloss YESUNAccountingEnglish 2009 50 Depletion Terminology Depletionreferstothecostbasiswrite offofnaturalresourcesNaturalresourcesarecharacterizedby completeremovaloftheasset andreplacementoftheassetonlybyanactofnature YESUNAccountingEnglish 2009 51 AccountingforExplorationCosts ExplorationcostsareusuallyexpensedasincurredThesecostsarecapitalizedwhen theyaresubstantial anduncertaintyexistsregardingfindingthenaturalresourceTwocompetingapproachesareemployedinpracticetoaccountforexplorationcosts nextslide YESUNAccountingEnglish 2009 52 AccountingforExplorationCosts Thetwoapproachesare Successfuleffortsapproach andFullcostapproachUnderthesuccessfuleffortsconcept onlyexplorationcostsofsuccessfulprojectsarecapitalized Underthefullcostconcept allcostsarecapitalized Eitherapproachiscurrentlyacceptable YESUNAccountingEnglish 2009 53 TheylackphysicalexistenceTheyrepresententity srightsandprivilegesTheyarenotfinancialinstrumentsTheyarelongterminnature Intangibles Characteristics YESUNAccountingEnglish 2009 54 TangibleAssetsAsaPercentofAllAssets YESUNAccountingEnglish 2009 55 Intangiblesareeithergroupedorseparatelyidentifiedbasedonthefollowingfactors Aretheassetsdevelopedinternally oracquiredsinglyoringroups Istheexpectedbenefitfromtheassetlimitedorindefinite Aretherightstransferableoraretheyasubstantialpartofthebusiness ClassificationofIntangibles YESUNAccountingEnglish 2009 56 Intangibles ValuationofIntangibleAssets YESUNAccountingEnglish 2009 57 Intangiblesarewrittenoffovertheirusefullives wheretheassetshavedeterminableusefullives Wheretheintangibleshaveindefiniteusefullives theyarenotamortized Acquiredintangiblesshouldnotbewrittenoffatacquisition AmortizationofIntangibleAssets YESUNAccountingEnglish 2009 58 Marketing related i e trademark tradename Customer related i e customerlists customerrelationships Artistic related i e copyrights Contract related i e franchise licensesorpermits Goodwill Technology related i e productpatent processpatent SpecificIntangibles Types YESUNAccountingEnglish 2009 59 Trademarksandtradenamesarerenewableindefinitelybytheoriginaluserinperiodsof10yearseach Costsofacquiredtrademarksortradenamesarecapitalized Iftrademarksortradenamesaredevelopedbytheabusiness alldirectcosts exceptR Dcosts arecapitalized Marketing RelatedIntangibles TrademarksandTradeNames YESUNAccountingEnglish 2009 60 Copyrightsaregrantedforlifeofthecreatorplus50years Copyrightscanbesoldorassigned butcannotberenewed Copyrightsareamortizedovertheirusefullife Costsofacquiringcopyrightsarecapitalized Researchanddevelopmentcostsinvolvedareexpensedasincurred Artistic RelatedIntangibles Copyrights YESUNAccountingEnglish 2009 61 Afranchiseisacontractualagreementunderwhich Thefranchisorgrantsthefranchisee therighttosellcertainproductsorservices therighttousecertaintrademarksortradenames ortherighttoperformcertainfunctions withinacertaingeographicalarea Contract RelatedIntangibles FranchisesandLicenses YESUNAccountingEnglish 2009 62 Afranchisemaybeforalimitedtime foranindefinitetimeperiod orperpetual Thecostofafranchise foralimitedtime isamortizedoverthefranchiseterm Afranchise foranunlimitedtime iscarriedatcostandnotamortized Annualpaymentsforafranchiseareexpensed FranchisesandLicenses YESUNAccountingEnglish 2009 63 Apatentgivesanexclusiverighttotheholderfor20years Costsofpurchasingpatentsarecapitalized Coststoresearchanddeveloppatentsareexpensedasincurred Patentsareamortizedovertheshorterofthelegallife 20years ortheirusefullives Legalfeesincurredtosuccessfullydefendpatentsarecapitalized Technology RelatedIntangibles Patents ProductPatentsandProcessPatents YESUNAccountingEnglish 2009 64 Go