...Property, Plant and Equipment Property, Plant and Equipment I- Nature of Accounting Issues Businesses purchase and use a variety of fixed assets, such as equipment, furniture, tools, machinery, buildings, and land. These fixed assets are long-term or relatively permanent assets. Also, they are tangible assets because they exist physically. They are owned and used by the business and are not offered for sale as part of normal operations. Perhaps the most descriptive titles these assets are known under are plant assets or property, plant and equipment. Depending on the industry, the plant assets of a business can be a significant part of its total assets. That is why the accounting for these long-term assets has important implications for a company’s reported results. In this paper, we discuss the proper accounting for the acquisition, use, and disposition of property, plant, and equipment. Before going over a brief overview of the nature of accounting issues, we ought to take a deeper look at what plant assets really are. The major characteristics of property, plant, and equipment are as follows: * They are acquired for use in operations and not for resale. Only assets used in normal business operations are classified as property, plant, and equipment. For example, an idle building is more appropriately classified separately as an investment. Also, land developers or sub dividers classify land as inventory. * They are long-term in nature and usually depreciated...
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...Objective The objective of IAS 16 is to prescribe the accounting treatment for property, plant, and equipment. The principal issues are: the timing of recognition of asset; the determination of their carrying amounts; and The depreciation charges to be recognized. Scope IAS-16 applied to all Property, Plant & Equipment until and unless any other standard requires or permits a different accounting treatment. Definition Property, Plant & Equipment are tangible items that: are held for use in the production or supply of goods or services; for rental to others; for administrative purposes; and are expected to be used during more than one period. Recognition The cost of an item or Property, Plant & Equipment shall be recognized as an asset if, and only if: it is probable that future economic benefits associated with the item will flow to the entity; and The cost of the item can be measured reliably. Measurement at Recognition An item of Property, Plant & Equipment that qualifies for recognition as an asset shall be measured at its cost. Elements of Cost Purchase price + (Import duties + Non refundable taxes) - (Trade Discounts + Rebates) Directly attributable costs. Initial estimate of the cost of dismantling and removing the item and restoring the site in which it is located. Costs that are not Costs of Property, Plant & Equipment Costs of opening new facility; Costs of introducing new product or service; Costs of conducting business in new location or with...
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...Property, plant and equipment |Level |[pic] |Typical coverage of US GAAP: | |US GAAP |Replace slides 2 and|Definition | | |3 with your own |Acquisition of PP&E: | | |material here, or |General | | |throughout as |Self-constructed assets | | |desired |Interest costs during construction | | | |Initial cost of natural resources | | | |Valuation at acquisition: | | | |Exchange of non-monetary assets | | | |Lump-sum purchases | | ...
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...The rules of life Rules for you: 1. Keep it under your hat. (no one likes a smart ass). DON’T PREA CH, PROPA G ATE, OR EVEN MENTION THIS. 2. WISDOM ISN’T ABOUT NO T MAKING MISTAKES BUT ABOUT LEARNING T O ESC APE AFTERW ARD WITH OUR DIGNITY AND SANITY INTA C T. learn to forgive yourself for the mistakes you made, and look out for new ones. Learn from your mistakes. 3. Accept What Is Done Is Done, keep moving on with your life. 4. Accept Yourself. YO U D O N ’ T H A V E T O IMPRO VE OR CHANGE OR STRIVE F OR PERFEC TION. QUITE THE OPPOSITE. JUST A CCEP T. 5. Know What Counts and What Doesn’t. THERE ARE SOME THINGS IN THIS LIFE THAT ARE IMPORTANT AND A WHOLE LO T O F T H I N G S T H AT AREN’ T. 6. dedicate your life to something. IT’S A Y ARDSTICK TO M E A S U R E (A) HO W I’M DOING, (B) WHAT I’M DOING, AND (C) WHERE I’M GOING. To be happy for family and God. 7. Be Flexible in Your Thinking. TRY T O SEE LIFE NO T AS THE ENEMY, BUT AS A FRIEND LY SPARRING PA R T N E R . be adventurous. Don’t be in a rut. 8. Take an Interest in the Outside World. TA K I N G A N I N T E R E S T I N THE OUTSIDE W ORLD IS ABOUT DEVEL OPING Y OU, RATHER THAN F OR THE WO R L D ’ S B E N E F I T. makes you an interesting person. Keeps u young. 9. Be on the Side of the Angels, Not the Beasts. WE GET T ORN BETWEEN WHAT WE W ANT AND WHAT IS GOOD F O R OT H E R S . 10. Only Dead Fish Swim with the Stream. AND THAT’S WHAT LIFE IS, WHAT IT IS MEANT T O BE: A...
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...ACCG 224 Report: Fairfax Media Limited 28th April 2014 (4pm) Juhi Agarwal Student Number: 42462843 Tutorial Class: Thomas Kern – Thursday 5pm-7pm Word Count: 2183 Contents: Executive Summary………………………………………………………………………….3 1. Introduction………………………………………………………………………………..3 2. Body……………………………………………………………………………………..…... 2.1 – A – Objective of GPFR and qualitative characteristics..……………….…….3, 4 2.2 – B – Disclosure requirements for PPE as per AASB116…...…………………….5 2.3 – C – Extent disclosure on PPE satisfy fundamental characteristics…………….6 2.4 – D – Extent disclosure on PPE align with the objective of GPFR……………..7,8 3. Conclusions and Recommendation…..…………………………………………………7,8 4. References………………………………………………………………………...………..9 5. Appendix……………………………………………………………………………….10,11 Executive Summary: The Board of Directors of Fairfax Media Limited discussed the importance of ensuring that this years financial reports should meet the objective of general purpose financial reporting and along with that the qualitative characteristics as outlined in the 2010 Conceptual Framework. The aim is to examine Fairfax Media Limited’s 2013 Annual Report and how the relevant disclosures in the company’s report concerning to PPE align with the Conceptual Framework’s objectives and qualitative characteristics. Introduction: Fairfax Media Limited is a prominent multi-platform media company throughout Australasia. The Fairfax Media...
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...Case Analysis- Inventory or Property Plant and Equipment Overview and Introduction Red Hen Company, which operates for producing and processing and selling fresh eggs. After its first year, it began to prepare financial statements. However, the accountancy found it’s hard to identify these egg-producing flocks as inventory or as property, plant and equipment. This essay will cite accounting standards and rules from FASB, identifying the definitions related to inventory and fixed asset, and discuss the related details in company’s specific situation. Finally, the essay will provide recommendations on how to present the hens in the financial statement, and draw a conclusion based on the previous recommendations. Identification Based on Accounting Principles and Specific Situation When preparing financial statements at the end of its first operating years, Red Hen Company has to identify the classification of its egg-laying flocks. Whether the items should appear in the inventory section under the current asset, or be treated as fixed asset? Admittedly, the egg-laying flocks can be identified as fixed asset (Property, plant, and equipment), which used to create and distribute an entity’s products and services [FASB ASC 360-10-05]. Specifically, egg-laying flocks could be treated as equipment. [FASB ASC 905-360-25-4] points out “except for animals with short productive lives classified as inventory, breeding animals, livestock (which includes cattle, hogs, sheep, and goats)...
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...The Economic Substance of Accounting Treatment of Property, Plant and Equipment Related IASs and Faithful Representation April 03, 2010 Introduction Theoretical principles of conceptual framework help determine which events should take place and when. They aid professionals with development of new standards and principles. The users of financial statements of public companies depend on the faithful representation of the entity’s financial statements. The financial statements must be adjusted on a regular basis to reflect economic substance of their information, as the users need these amounts to faithfully represent the account balances as an indicator of a company’s future earning power. As IFRS is introduced into Canadian practice in 2001, companies will be required to focus on which methods will emphasize economic substance with the changes in accounting policies. In the following discussion, we will focus one aspect of the conceptual framework around IFRS, in particular, economic substance, as it relates to the application of IFRS in reporting Property Plant and Equipment (PPE.) Recognition of PPE to Reflect Economic Substance Changes to the recognition of property, plant, and equipment Among the most significant changes are the options of accounting policy regarding the ongoing valuation of an asset on a class by class basis. Under GAAP, the cost model was the only choice; IFRS provides two options, the cost model or the revaluation model. These options are...
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...Chapter 13 Auditing the Inventory Management Process Answer Key True / False Questions 1. The "cradle-to-grave" cycle for inventory begins when goods are purchased and stored and ends when the finished goods are shipped to customers. TRUE AACSB: Analytic AICPA BB: Industry AICPA FN: Decision Making Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-01 Develop an understanding of the inventory management process. Topic: Overview of Inventory Management Process 2. A receiving report records the shipment of goods to customers. FALSE AACSB: Analytic AICPA BB: Industry AICPA FN: Decision Making Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-02 Be able to identify and describe the types of documents and records used in the inventory management process. Topic: Types of Documents and Records 3. Sale of finished goods is a part of the inventory management process. FALSE AACSB: Analytic AICPA BB: Industry AICPA FN: Decision Making Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-03 Understand the functions in the inventory management process. Topic: The Major Functions 4. Once the controls in the inventory system have been tested, the auditor sets the level of control risk. TRUE AACSB: Analytic AICPA BB: Industry AICPA FN: Risk Analysis Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-06 Know how to assess control risk for the inventory system. Topic: Control Risk...
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...Operations Officer a midsized window frame, aluminum siding, and tire recycling equipment manufacturing company located in the northeastern United States. Your company is organized along product lines, and you directly supervise the three people in charge of each of these product lines. The plants for these products are geographically dispersed over a two state area; the nearest plant is located only ten minutes away but the farthest plant is a two hour drive from the company headquarters. Although your company has been financially sound over the past ten years, over the past four months your company has been experiencing a serious cash flow problem. You believe part of this problem stems from the recent downturn in the local, regional, and national economy. However, you also believe this problem may be due to inefficient plant operations. You have called in the heads of the three product lines to determine whether plant operations can be improved to help alleviate the cash flow problem. The following is a more complete description of the three product lines and the people responsible for running these operations. Navya started with the company 20 years ago assembling window frames and has been in charge of the window frame plant for a little over two years. Navya is in charge of 12 full time employees, and this is the first formal supervisory position she has ever held. Because she started at the plant immediately upon graduating from high school, Navya does not have a college...
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...PLANT LOCATION The decision on locating an industrial plant is frequently one that has a vital effect on the success or failure of the operation of that plant. Hence it should be based upon a careful consideration of all factors pertinent to the business of the particular enterprise. Steps in selecting a plant site Selection of the region * Proximity to the market * Proximity to the necessary materials * Availability of transportation facilities * Adequacy of public and private services such as power, water, fuel, and gas * Favorable climatic conditions Selection of the particular community Which of all the communities in the chosen region can best supply the needs of the individual enterprise? * A labor supply that is adequate in numbers and in types of skill required. * Wage scales that competitive with or lower than those paid by other firms in the same industry. * Other enterprises in the community which are complementary or supplementary as regards raw materials, products ,labor demands and skills used. * Moderate taxes and the absence of restricting laws and ordinance. * Favorable living conditions and standards which label the community for both key and rank-file employees as a good place in which to live. Selection of the exact plant site Alternative communities may have to considered it no available or adequate plant site can be found in the first community selected. Trends in Plant Location * First is the...
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...facility, and sold to customers for distribution. The plant manager, Inger Hansen, is contemplating a plant modernization to upgrade the technology in the plant. While the plant performs well enough now, modernizing equipment would allow the plant to increase capacity per hour, which is particularly advantageous because the factory has enough demand to cover the additional capacity. Currently, the plant operates five days a week, two shifts of 30 workers per shift. The workers are paid $10 per hour. Adding a third shift is not possible because the plant is cleaned during the third shift. The firm is contemplating a plant modernization to upgrade existing equipment, which should increase the plant’s output while lowering energy costs. Using the current equipment, around 1.500 pounds of salmon can be processed each hour, while the new plant would be able to processed each hour, while the new plant would be able to process 2.000 pounds per hour. The updated equipment is made by the same manufacturer as the existing equipment, and the new equipment quickly. For this reason, costs to train personnel are assumed to be negligible. The production manager, Bjorn Pedersen, is skeptical about undergoing the plant modernization. The older equipment, he argues, is already paid for, and new equipment would cost $10.000 per week. This cost is comprised of both principal and interest, and includes manufacturer installation of the equipment. The controller, Maret Karlsen, cautions that all decisions...
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... • In economics: we talk about physical production and inputs inputs are typically capital and labour, by capital we mean “physical” capital (property, plant, equipment) and not “financial” capital (equity). • In accounting: we talk about property and assetscapital (equity!!)is one of the sources of financing The difference between inputs and assets: - rented offices (input, but not asset – the rent is in IS, nothing in BS ) - rights (patents, licenses, claims – assets, but not inputs) - labour (input, but not asset – the cost of labour is in IS, nothing in BS) - services (input, but not asset – the cost of services is in IS, nothing in BS) 1 ASSETS Two major components of assets are: 1. FIXED ASSETS (more than one year in a company) - Tangible assets that have a long-term usefulness (property, plant & equipment) - Intangible assets with long-term value (patents etc.) 2. CURRENT ASSETS (up to one year in a company) - Inventories of raw material, work in progress and finished goods - Accounts receivable are claims against customers for products sold - Cash - Trading securities ASSETS Balance Sheet Shows property (Assets) and how this property is financed (Liabilities). Simplified scheme: Assets Liabilities + Equity A. Fixed assets - property, plant & equipment - intangible assets (patents etc.) Operating current assets A. Owners’ equity/Capital - capital - accumulated retained profits/losses B. Current assets ...
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...Operate plant in a quiet and efficient manner 4 Involve workers in minimizing noise 5 Handle complaints 5 Location of plant 5 Alternatives to reversing alarms 5 Maximize shielding 6 Schedule activities to minimize noise impacts 6 NOISE FROM CONSTRUCTION SITES INTRODUCTION Construction sites are often located near existing residential accommodation and by their nature are noisy and open sites. Residents will in general accept construction site noise due to their temporary status. However, if works starts early or finishes late or if it takes place on a Saturday afternoon, Sunday or public holiday noise complaints may be likely. In many areas, the recommended hours of operation for construction are: * Monday - Friday: Start 7:30am (with a restriction on the hours of operation heavy plant and machinery and major demolition and construction works until 8:00am) and finish at 6pm. * Saturday: Start 9am. And Finish at 1pm. * Sundays and Bank Holidays: No work permitted. Construction plant and equipment noise levels can be described in two ways: * sound power level (Lw or SWL), or * Sound pressure level at a given distance (Lp or SPL). The sound power level is the intrinsic noise output of plant or equipment, and does not depend on distance or orientation of the machine. There are international standards that define methods for determining the sound power level of a machine. The sound pressure level is the noise at a given distance from plant or equipment, and the...
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...CHAPTER 10 PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLE ASSETS SUMMARY OF QUESTIONS BY OBJECTIVES AND BLOOM’S TAXONOMY Item 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75. 76. 77. 78. 79. 80. 81. 82. 83. sg st a SO 1 1 1 1 1 1 2 2 2 2 2 3 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 BT K K K K K C C K C K K C K AP C C K C AP AP AP AP K C C AP K C AP AP K K K K K C K C K Item 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 88. 89. 90. 91. 92. 93. 94. 95. 96. 97. 98. 99. 100. 101. 102. 103. 104. 105. 106. 107. 108. 109. 110. 111. 112. 113. 114. SO 3 3 3 3 4 4 4 5 5 5 5 6 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 BT K K K K K K K K K K K K AP AP K AP K AP AP K K K K AP AP K AP C K AP AP AP AN AP AP AP AP C AP Item 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 119. 120. 121. 122. 123. 124. 125. 126. 127. 128. 129. 130. 131. 132. 133. 134. 135. 136. 137. 138. 139. 140. 141. 142. 143. 144. 145. SO 6 6 6 6 6 6 6 7 7 7 7 7 3 3 3 3 4 4 4 4 4 4 4 5 5 5 5 5 6 6 6 6 6 6 6 6 6 6 6 BT C C C K C K C K K K K K AP AP AP AP AP AP AP K K K AN K K K C C C K K C C AP K K C C C Item 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. a 47. a 48. 150. 151. 152. 153. 154. 155. 156. 157. 158. 159. 160. 161. 162. 163. 164. 165. 166. 167. 168. 169. 170. 171. 172. 173. 174. 175. 176. SO 7 7 8 8 8 8 8 9 9 9 10 10 6 6 6 6 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 8 8 8 BT C K K K K K K K K K...
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...2013 Pest Management Standards For Food Plants i INTRODUCTION T he National Pest Management Association is pleased to release the 2013 Pest Management Standards for Food Plants. Since 2007, these standards have been the cornerstone of NPMA’s Commercial Division activities. Of note in the 2013 revision is the move away from prescriptive instructions regarding placement and monitoring frequency of pest management devices. Instead, a more results-oriented approach to pest management, based on pest trends, inspection observations, and professional knowledge is embraced. As stated in previous editions, these standards also do not preempt local, state, provincial, and/ or federal regulations. Any service provided must comply with government regulations or statutes governing pest management, safety, and food protection. In addition, food plants may have requirements more stringent than these standards. By embracing these standards, pest management firms demonstrate the industry’s role as protectors of food and property. In addition to these standards, a comprehensive online testing site can be found at www.npmatesting.com. This website includes the study guide and other resources noted in the standards. Through this site, NPMA is working to provide the tools necessary for pest management firms to comply with the standards and raise the level of competency of pest management professionals servicing food plants. We hope that you find these standards to be a...
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