1. Learning Objectives Understand the Business – LO1 Define, classify, and explain the nature of long-lived assets. Study the accounting methods – LO2 Apply the cost principle to the acquisition of long-lived assets. – LO3 Apply various amortization methods as economic benefits are used up over time. – LO4 Explain the effect of asset impairment on the financial statements. – LO5 Analyze the disposal of long-lived tangible assets. – LO6 Analyze the acquisition, use, and disposal of long-lived intangible assets. Evaluate the results – LO7 Interpret the fixed asset turnover ratio. – LO8 Describe factors to consider when comparing companies’ long- lived assets. Review the chapter 1© McGraw-Hill Ryerson. All rights reserved.

2. Long-Lived Assets Long-lived Assets are the resources owned by a business that enable it to produce the goods or services that are sold to customers. They are not intended for resale. © McGraw-Hill Ryerson. All rights reserved.2 Tangible Assets Have physical substance Intangible Assets Have special rights, but no physical substance LO1

3. © McGraw-Hill Ryerson. All rights reserved.3 Tangible Assets are also known as Fixed Assets or Property, Plant & Equipment. Intangible Assets include Goodwill, Patents, Copyrights and Trademarks. Land improvements include sidewalks, pavement and fencing that improve the usefulness of land. They deteriorate over time. Construction in progress includes the cost of constructing new buildings and equipment. When finished, these cost are moved to the appropriate account. Balance Sheet Presentation LO1