中级财务会计教案15周.doc

天府学院TIANFU SCHOOL, SWUFE教 案任课教师： 魏历课程名称：中级财务会计I任课班级：2012级会计06-11班和审计01班授课时间：2014-2015-1学期教 案 编号：15章,节Chpater 6 Property , Plant, Equipment, and Intangible assets :Utilization and Impairment授课方式Teaching and in-class discussion and exercises 教学目的To make students are able to explain the concept of cost allocation as it pertains to property, plant, and equipment and intangible assets .to determine periodic depreciation using both time- based and activity-based methods. To calculate the periodic depletion of a natural resources and the periodic amortization of an intangible asset. And can explain theappropriate accounting treatment required when a change in depreciation, amortization or depletion methods is made and to explain the appropriate treatement required when an error in accounting for property, plant, and equipment and intangible assets is discovered. To identify situations that involve a significant impairment of the valule of property, plant ,and equipment and intangible assets and describle the required accounting procedure.discuss the accounting treatment of repairs and maintenance ,additions ,improvements, and rearrangements to property, plant, and equipment and intangible assets. And discuss the primary difference between GAAP and IFRS with respect to the utilization and impairment of property, plant, and equipment and intangible assets. In this chapter ,through in-class discussion and exercises to be able to apply to realistic and specific cases and also try to improve the ability of active and independent thinking.教学重点To make students are able to explain the concept of cost allocation as it pertains to property, plant, and equipment and intangible assets .to determine periodic depreciation using both time- based and activity-based methods. To calculate the periodic depletion of a natural resources and the periodic amortization of an intangible asset To identify situations that involve a significant impairment of the value of property, plant ,and equipment and intangible assets and describe the required accounting procedure. And discuss the primary difference between GAAP and IFRS with respect to the utilization and impairment of property, plant, and equipment and intangible assets.教学难点To make students are able to explain the concept of cost allocation as it pertains to property, plant, and equipment and intangible assets .to determine periodic depreciation using both time- based and activity-based methods. To calculate the periodic depletion of a natural resources and the periodic amortization of an intangible asset To identify situations that involve a significant impairment of the valule of property, plant ,and equipment and intangible assets and describle the required accounting procedure. And discuss the primary difference between GAAP and IFRS with respect to the utilization and impairment of property, plant, and equipment and intangible assets.时间分配4 Weeks 教 学 内 容First to do in-class discussion on exercises from last class which required finishing after classGroup and composite depreciation methodsTo reduce record keeping costs, group and composite depreciation methods aggregate assets to depreciate them collectively rather than individually. Group and composite methods differ only in criteria used to aggregate the assets for depreciation.We implement either method by applying a single straight-line rate based on the average service lives of the aggregated asset. Annual depreciation is determined by multiplying the average rate times the total group acquisition cost. Accumulated depreciation records are not maintained for individual assets.If assets in the group are sold, or new assets added, the composite rate remains the same. When an asset in the group is sold or retired, we debit accumulated depreciation for the difference between the assets cost and the proceeds. No gain or loss is recorded.U.S. GAAP vs. IFRSUnder U.S. GAAP a company reports property, plant, and equipment in the balance sheet at cost less accumulated depreciation (book value). ISA No. 16 allows a company to report property, plant, and equipment at cost less accumulated depreciation, or, alternatively, at its fair value (revaluation). If a company chooses revaluation, all assets within a class of property, plant, and equipment must be revalued on a regular basis. U.S. GAAP prohibits revaluation.If the revaluation option is chosen, the way the company reports the difference between fair value and book value depends on which amount is higher: If fair value is higher than book value, the difference is reported as other comprehensive income (OCI) which then accumulates in a “revaluation surplus: (sometimes called revaluation reserve) account in equity. If book value is higher than fair value, the difference is reported as an expense in the income statement. An exception is when a revaluation surplus account relating to the same asset has a balance from a previous increase in fair value, that balance is eliminated before debiting revaluation expense.Depletion of Natural ResourcesIn general, natural resources can be thought of as anything extracted from our natural environment such as coal, oil, and iron ore. Allocation of the cost of natural resources is called depletion. Total cost, including exploration and development, is charged to depletion over the periods benefited. We use the units-of-production method to compute depletion, and report natural resources at their cost less accumulated depletion.We begin the process of calculating depletion expense by determining the depletion expense per unit of the natural resource. The numerator of the equation contains the resource cost less any estimated residual value. The denominator of the equation is our estimated total capacity of the natural resource we expected to extract. For oil we express the denominator in terms of barrels and for coal or iron ore we use tons.Once we compute the depletion rate per unit of output, we may calculate depletion for the period by multiplying the depletion rate per unit times the number of units extracted.Lets look at an example:ABC Mining acquired a tract of land containing ore deposits. Total costs of acquisition and development were $1,100,000. ABC estimated the land contained 40,000 tons of ore, and that the land will be sold for $100,000 after the coal is mined. What is ABCs depletion rate? Explanation: We divide the $1,100,000 cost minus the $100,000 residual value by the number of units in the estimated service life to get the depletion rate of $25 per ton. For the year ABC mined 13,000 tons. What is the total amount of depletion for the year?Explanation: We multiply the depletion rate of $25 per ton times the 13,000 mined to get $325,000 of total depletion. Depletion is a product cost that is included in the cost of coal inventory. The depletion is then included in cost of goods sold in the income statement when the coal is sold.U.S. GAAP vs. IFRSLiving animals and plants, including the trees in a timber tract or in a fruit orchard, are referred to as biological assets. Under U.S.GAAP, a timber tract is valued at cost less accumulated depletion and a fruit orchard at cost less accumulated depreciation. Under IFRS, biological assets are valued at their fair value less estimated costs to sell.Amortization of Intangible AssetsAmortization is the process of allocating the cost of an intangible asset to the periods benefited by its use. The amortization process uses the straight-line method, but usually assumes a zero residual value. The amortization period is the shorter of the intangible assets legal or contractual life.The journal entry to record amortization requires a debit to amortization expense and a credit to the intangible asset account. Companies generally do not use a contra-asset account such as accumulated amortization when recording the amortization of intangible assets.Amortization expense .$Intangible asset .$To record amortization expense.Lets look at an example:Torch, Inc. has developed a new device. Patent registration costs consisted of $2,000 in attorney fees and $1,000 in federal registration fees. The device has a contractual (useful) life of 5 years. The legal life is 20 years. At the end of year 1, what is Torchs amortization expense?Explanation: Since the five-year economic life is shorter than the twenty-year legal life for this patent, we will amortize the patent over five years.The amortization expense is the assets cost of $3,000 divided by its economic life of five years, resulting in annual amortization of $600.The journal entry to record amortization requires a debit to amortization expense for $600 and a credit to the patent account for $600. The patent will have a book value of $2,400 after the amortization entry is posted.Note: Goodwill and trademarks have indefinite useful lives and are not amortized into the results of operations, but instead are reviewed for impairment annually or more often if impairment indicators arise. If impairment is determined to exist, we will reduce the asset account and recognize the loss in value.U.S. GAAP vs. IFRSIAS No. 38 allows a company to value an intangible asset subsequent to initial valuation at (1) cost less accumulated amortization or (2) fair value, if fair value can be determined by reference to an active market. If revaluation is chosen, all assets within the class of intangibles must be revalued on a regular basis. Goodwill, however, cannot be revalued. U.S.GAAP prohibits revaluation of any intangible asset.The revaluation option is possible only if fair value can be determined by reference to an active market, making the option relatively uncommon. However, the option possibly could be used for intangibles such as franchises and certain license agreements.If the revaluation option is chosen, the accounting treatment is similar to the way we applied the revaluation option for property, plant, and equipment earlier. The way the company reports the difference between fair value and book value depends on which amount is higher. If fair value is higher than book value, the difference is reported as other comprehensive income (OCI) and then accumulated in a revaluation surplus account in equity. If book value is higher than fair value, the difference is expensed. Partial-Period Depreciation To this point we have discussed assets that were purchased at the beginning of a year and depreciated for a full year. Relatively few assets will actually be purchased on January 1. When an operational asset is acquired during the year, depreciation is calculated for the fraction of the year the asset is owned.Pro-rating the depreciation based on the date of acquisition is time-consuming and costly. A commonly used alternative is the half-year convention. Using this convention, a company would record one-half year of depreciation in the year of acquisition, and one-half year of depreciation in the year of disposal.Changes in EstimatesPurchased that cost $30,000, has a useful life of ten years and no salvage value. At the beginning of the fourth year, it was decided that there were only five years remaining, instead of seven years. Calculate depreciation expense for the fourth year using the straight-line method.The depreciation expense for each of the first three years is $3,000 ($30,000 cost divided by the original estimated useful life of ten years). The accumulated depreciation for the first three years totals $9,000, computed by multiplying the $3,000 of depreciation each year times three years.The undepreciated cost (book value) of the equipment on the date of change is $21,000, computed by subtracting $9,000 of accumulated depreciation from the $30,000 cost.To calculate the amount of straight-line depreciation for each of the remaining five years of the equipments life, we divide the $21,000 book value of the equipment by five years. The resulting straight-line depreciation is $4,200 per year.Now, lets see how to account for a change in depreciation method.Change in Depreciation MethodA change in depreciation, amortization, or depletion method is considered a change in accounting estimate that is achieved by a change in accounting principle. We account for these changes prospectively, exactly as we would any other change in estimate. However, in the case of a change in depreciation method, the required disclosure note must also provide justification for why the new method is preferable. Lets look at an example:On January 1, 2009, Matrix, Inc., a calendar year-end company purchased equipment for $400,000. Matrix expected a residual value $40,000, and a service life of five years. Matrix uses the double-declining-balance method to depreciate this type of asset. During 2011, the company switched from double-declining balance to straight-line depreciation. Lets determine the amount of depreciation to be recorded at the end of 2011. Part IDouble-declining-balance depreciation for 2007 was $160,000 ($400,000 cost times forty percent). For 2008 the double-declining-balance depreciation was $96,000 ($240,000 book value times forty percent). Accumulated depreciation for the first two years totals $256,000. Part II.The undepreciated cost (book value) of the equipment on January 1, 2009, the date of the change, is $144,000, computed by subtracting $256,000 of accumulated depreciation from the $400,000 cost of the equipment. To calculate the amount of straight-line depreciation for each of the remaining three years of the equipments life, we divide the remaining depreciable amount of $104,000 ($144,000 40,000) by three years. The resulting straight-line depreciation is $34,667 per year. For each of the remaining three years of the equipments life (2009, 2010, 2011), the adjusting entry for depreciation is t