会计英语第六章复习

Acquisition Date
The cost of the asset is determined by the cash or cash-equivalent price paid to acquire the asset. There may be many cost components incurred to acquire and prepare the asset for its intended use. Purchase price Freight costs [freɪt] 运费 Installation cost [ɪnstə‘leɪʃ(ə)n] 安装成本 of a productive asset. Example P58
Depreciation cost per unit =
Depreciation expense for period= Depreciation cost per unit ×actual production amount during current period Note that the straight-line method provides a constant不变的 depreciation amount per year, but the units-of-production method provides a constant amount per unit of production.
During its useful life
After acquisition, tangible operational assets decrease in economic utility to the user because of a number of causative factors, such as wear and tear 磨损, the passage of time时光流逝, obsolescence [,ɒbsəʊ‘lesəns]过时, and technological changes技术进步. Depreciation is the accounting process of allocating the periodic expiration of capital assets against the periodic revenue earned.
2. Units-of-production method 工作量法 The Units-of-production method allocates the cost of an asset to usage rather than years. This method amortizes the cost of the asset over the estimated service life as measured by estimated units of production, not by estimated years. If the use of the asset varies and the contribution to revenue differs from period to period, the unitsof-production method may be appropriate. The depreciation per unit of production is determined as follows:
3. Accelerated methods Accelerated methods charge higher amounts of depreciation to the earlier years of an asset’s life. As an asset has greater economic benefit in the earlier years of its life than in the later years, depreciation should be allocated more in the early years of the asset’s life, the amount of depreciation charged period declines with time. Two common methods for allocating depreciation on an accelerated basis are sum-of-the-year’sdigits method年数总和法anddeclining-balance method双倍余额递减法
Depreciation methods
1. Straight-line method 直线折旧法 The straight-line method of depreciation allocates equal amounts of the cost of an asset to each accounting period during its estimated life. This method is the most common method used to allocate the cost of property, plant and equipment among accounting periods because it is easy and simple to calculate. A typical example would be depreciation for a building or for office furniture. The depreciation is computed as follows:
Chapter 6
Non-Current Assetsleting this chapter, you should be able to: 1. Describe the nature of depreciation. 2. Explain the factors that affect the determination of depreciation expense. 3. Calculate the amount of depreciation by the straight-line method. 4. Calculate the amount of depreciation by units-of-production methods. 5. Calculate accelerated depreciation under the decliningbalance method and the sum-of-the-years’-digits method.
Factors affecting depreciation
Factors that influence depreciation are cost of the asset; C estimated residual value (or salvage value); RV estimated service life; N or P depreciation rate; R Dollar amount of depreciation per period. D
Special Terms
(1) depreciation (n.) 折旧 (2) residual value (or salvage value) 残值 (3) straight-line method 直线法 (4) the units-of-production method 工作量法 (5) accelerated method 加速折旧法 (6) declining-balance method 余额递减法 (7) sum-of-the-years’-digits method 年数总和法 (8) double-declining-balance (DDB) method 双倍余额递减 法 (9) accumulated depreciation 累计折旧
The entry to record this depreciation expense would be Depreciation expense 90,000 Accumulated depreciation 90,000 On the balance sheet, accumulated depreciation is deducted from the cost of property , plant, and equipment, and difference, called the book value ( or property, plant, and equipment, net), is included in total assets.
Land, buildings , machinery[mə'ʃiːn(ə)rɪ], equipment, furniture, tools, vehicles ['viːɪk(ə)l] and natural resources.
The primary phases of accounting for operational assets are: 1. Measuring and recording the cost of the asset at acquisition date. 2. After acquisition, measuring the expense of using the asset during its useful life. 3. Recording disposal of operational assets.
Cost Residual value Depreciation per year Service life in years