expenditures are additional costs of plant assets that provide benefits extending beyond the current period, such as a plant expansion, or machine overhaul.
What does the cost of a plant asset include?
The historical cost of a plant asset includes the purchase price plus taxes, purchase commissions, and all other amounts paid to ready the asset for its intended use.
What are additions to plant assets?
When an addition is made to plant assets, it is intended to increase productive capacity, increase the assets’ useful life, or increase the efficiency of the assets. This is called a capital expenditure.
Are additional costs of plant assets that do not materially increase?
Revenue expenditures: Are additional costs of plant assets that do not materially increase the asset’s life or its productive capabilities. Are known as balance sheet expenditures because they relate to plant assets. Extend the asset’s useful life.
When a plant asset is sold for more than the assets book value?
Assessed value is the value of an asset determined by tax authorities for the purpose of calculating taxes. Revenue that results when a plant asset is sold for more than book value is known as loss on plant assets.
What are the plant assets?
Plant assets are a group of assets used in an industrial process, such as a foundry, factory, or workshop. These assets are a subset of the fixed assets classification, which includes such other asset types as vehicles, office equipment, and intangible assets.
What are plant assets quizlet?
Plant assets are defined as: Tangible assets that have a useful life of more than one accounting period and are used in the operation of a business.
Are plant assets current assets?
No, plants and plant assets are not current assets. A current asset is any asset that will provide an economic benefit for or within one year. Plants are a part of the property, plants, and equipment, or PP&E, account. PP&E has a useful life longer than one year, so plants are considered a non-current asset.
What are additions to fixed assets?
Fixed asset additions are expenses added to the purchase price of the asset made after it’s initial purchase (if they meet the definition of fixed assets and the criteria of appearing on the balance sheet). You can add a new addition by selecting ‘More’ – ‘New addition’ from the toolbar of the fixed asset chart.
What is plant asset management?
Plant asset management is a software framework that provides information about the asset condition, as well as helps optimize operations and improve plant asset capabilities.
Are assets that increase the benefits of land have a limited useful life and are depreciated such as walkways and fences?
Assets that increase the benefits of land, have a limited useful life, and are depreciated—such as parking lots and street lights—are called: land improvements.
What is the process of allocating the cost of a plant asset to expense while it is in use?
Depreciation is the process of allocating the cost of a plant asset to expense in the accounting periods benefiting from its use.
What is an extraordinary repair to a building?
Definition: An extraordinary repair is a major repair to an asset that extends its useful life beyond what was originally predicted. In other words, an extraordinary repair is an upgrade or overhaul that makes an asset last longer or increases its usability.
When a plant asset is sold for less than its book value a gain is recorded?
Loss on Disposal of Plant Assets is credited when a plant asset is sold for less than its book value. Gain on Disposal of Plant Assets is classified as a revenue account and appears in the Other Revenue section of the income statement.
Are plant assets tangible or intangible?
Tangible assets are physical and measurable assets that are used in a company’s operations. Assets like property, plant, and equipment, are tangible assets.
Is sale of plant assets included in financing activities?
Often this loss appears in the income statement section entitled Other or Nonoperating. The $10,000 of proceeds from the sale of the plant asset is also reported as a positive amount in the investing activities section of the statement of cash flows.