Plant assets /Natural resources/ intangible assets
by A Mohamed
1. Depletion
1.1. The allocation of the cost to expense in a rational and systemic manner over the resources useful life
1.2. Companies generally use the units of activities to compute deplane
2. Intangible assets
2.1. Are rights , privilege and competitive advantages that result from owner ship of long lived assets
2.2. Limited life intangible assets
2.2.1. Patent/ copyright/ franchise
2.2.1.1. Amortize to expense/ credit asset account
2.3. Indefinite life intangible assets
2.3.1. Good will / trademarks
2.3.1.1. No amortization/ asset will remain in balance sheet at their cost
3. Franchise
3.1. Is a contractual arrangement under which the franchisor grants the franchise the rights
3.1.1. Accounting’s for acquiring and defending franchise
4. Depletion
4.1. The allocation of the cost to expense in a rational and systemic manner over the resources useful life
5. Intainassets
6. Disposal of plant assets
6.1. Retirement
6.1.1. Fully depreciated assets
6.1.1.1. Decrease credit the asset account for the original cos in assets
6.1.1.2. Decrease debit the accumulated depreciation for the full amount of depreciation
6.2. Sale of plant asset
6.2.1. If proceeds > the book value , again on disposal occurs
6.2.2. If proceeds are less than book value a loss on diapoasal occurs
6.3. Exchange
6.3.1. Record a gain or loss on the exchange of plant assets
6.3.2. Most exchange have commercial substance