In this unit, you will learn about the accounting principles and practices related to plant assets and depreciation.
Plant assets, also known as long-term assets or fixed assets, are major assets that a business holds and uses to produce revenue over many periods. These assets include land, buildings, equipment, and other tangible assets, as well as intangible assets such as goodwill, patents, and copyrights. It is important to properly account for these assets in order to accurately reflect the company's financial position and performance.
In this unit, you will also learn about the related concept of depreciation, which is the process of allocating the cost of a plant asset over its useful life. There are several methods for calculating depreciation, and the choice of method depends on the nature of the asset and the company's accounting policies.
This unit is divided into several sections, including:
- Nature and Meaning of Long-term Assets
- Determination of the Acquisition Cost of Plant Assets
- Depreciation and Factors that Affect the Computation of Depreciation
- Methods of Computing Depreciation
- Recording Depreciation
- Special Depreciation Methods
- Revision of Depreciation Rates
- Capital and Revenue Expenditure
By the end of this unit, you will have a solid understanding of the accounting principles and practices related to plant assets and depreciation.