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Operational Assets: Utilization and Impairment





After studying this chapter, you should be able to:
  • LO1 Explain the concept of cost allocation as it pertains to operational assets.

  • LO2 Determine periodic depreciation using both time-based and activity-based methods.

  • LO3 Calculate the periodic depletion of a natural resource.

  • LO4 Calculate the periodic amortization of an intangible asset.

  • LO5 Explain the appropriate accounting treatment required when a change is made in the service life or residual value of an operational asset.

  • LO6 Explain the appropriate accounting treatment required when a change in depreciation, amortization, or depletion method is made.

  • LO7 Explain the appropriate treatment required when an error in accounting for an operational asset is discovered.

  • LO8 Identify situations that involve a significant impairment of the value of operational assets and describe the required accounting procedures.

  • LO9 Discuss the accounting treatment of repairs and maintenance, additions, improvements, and rearrangements to operational assets.








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