Acc 291 Week 2 Dqs and Participation Questions Essay

The type of depreciation method the Target Corporation uses is a straight-line method. Property and equipment is depreciated using the straight-line method over estimated useful lives or lease terms if shorter. “Target amortizes leasehold improvements purchased after the beginning of the initial lease term over the shorter of the assets' useful lives or a term that includes the original lease term, plus any renewals that are reasonably assured at the date the leasehold improvements are acquired” (Stock Analysis, n.d.).

> Depreciation applies to three classes of plant assets: land improvements, buildings, and equipment. Each of these classes is considered to be a depreciable asset because the usefulness to the company and the revenue-producing ability of each class decline over the asset’s useful life.

My response would be that depreciation matches the expense of the asset to the life of the asset. On the books, accumulated depreciation represents the amount claimed so far. Claiming depreciation gets you a slight tax break (say 15% to 35%). Prices go up in the mean time.

9. The straight-line method reports depreciation as a variable amount per unit of output and a fixed amount per period, whereas the productive output method reports depreciation as a fixed amount per unit of output and a variable amount per period.

The way that they record depreciation and amortization is by using the straight-line method over the shorter of the estimated useful lives of their assets or the terms of the respective leases. As we have learned, straight-line method is one of the types of ways that a company can depreciate their assets. This method considers depreciation as a “function of time rather than a function of usage.” Because this method is known to be one of the simplest, many companies often use it, including Toys “R” Us. The straight-line procedure is also often considered to be the most conceptually appropriate. The straight-line method often results in a major objection because it rests on two tenuous assumptions. The two include: The asset's economic usefulness is the same each year, and the maintenance and repair expense is essentially the same each period. Another problem that arises from using the straight-line method is that distortions in the rate of return analysis (income/assets)

There has to be genuine reason for changing the method of depreciation that must be carefully assessed and duly authorized by concerned authority. In the given situation, it is possible that the reasons explained are valid. The effects have to be retrospectively stated in the financial statements. These relations to management philosophy and operating style.

Straight-line depreciation method is used for all property and equipment over the estimated useful life of the assets; 3 to 10 years for furniture, office equipment and

Property and equipment are carried at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets, generally up to 30 years, or the lease term for leasehold improvements, if applicable. Leased buildings are capitalized and included in property and equipment when the Company was involved in the construction funding and did not meet the “sale-leaseback” criteria.

The concept and practice of depreciation and depletion play an integral part in a company 's cash flow and profit or loss statements. Depreciation, according to investopedia is a method of allocating the cost of a tangible asset over its useful life. Depletion is very similar to depreciation with very subtle differences, the first one being what is depreciated verses depleted. All assets (except land) are depreciated but the assets with natural resources are depleted. The methods on how depreciation and depletion are calculated vary as well. Each will be visited in this essay.

35-4 The cost of a productive facility is one of the costs of the services it renders during its useful economic life. Generally accepted accounting principles (GAAP) require that this cost be spread over the expected useful life of the facility in such a way as to allocate it as equitably as possible to the periods during which services are obtained from the use of the facility. This procedure is known as depreciation accounting, a system of accounting which aims to distribute the cost or other basic value of tangible capital assets, less salvage (if any), over the estimated useful life of the unit (which may be a group of assets) in a systematic and rational manner. It is a process of allocation, not

Depreciation is non-cash items because it is an estimate of the location of the cost of non-current assets to the particular year. What the Ltd needs to do next is that they need to remove the non-cash items. For example, debt depreciation is an expense that means to arrive at the Net income; it needs to minus in depreciation then will get the profit. So, the Ltd needs to add it back in order to remove the depreciation. Amortization is something the company has advertised and discount which took away from the Net income and then add back to Net income to figure it out what has happened to it. We subtract gains and add back

The cost model estimates that the asset is carried at cost less accumulated depreciation and impairment. Under the revaluation model, the asset is carried at a revalued amount, being its fair value at the date of revaluation less depreciation and impairment. The revaluation model is much more complicated than the cost model. The property, plant and equipment are carried at cost less accumulated depreciation in Starbucks. Depreciation is calculated using the straight-line method over estimated useful lives of the assets, generally ranging from 2 to 15 years for equipment and 30 to 40 years for buildings. When assets are disposed of, whether through retirement or sale, the net gain or loss is recognized in net earnings. For assets within our retail operation, net impairment and disposition charges are recorded in store operating expenses. For all other assets, these charges are recorded in cost of

Depreciation refers to prorating tangible and intangible asset’s cost less any salvage value evenly over the useful life of the asset. For an item to be considered an asset, it must intended for operations of the business and not for resale. Useful life should be reasonable but can vary from one asset to another from one view point to another. Estimated useful life is the time period in which an asset is expected to contribute to usefulness to a company. Not all assets will have salvage value. With the exception of land, all assets are

Generally, valuation is done by using cash flows and other financial factors. The value of intangible assets is

The important thing is Amortization refers intangible, Depreciation refers tangible and depletion refers to natural resources.