| Accelerated depreciation method | Method that produces larger depreciation charges in the early years of an asset's life and smaller charges in its later years.
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| Amortization | Process of allocating the cost of an intangible asset to expense over its estimated useful life.
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| Betterments | Expenditures to make a plant asset more efficient or productive; also called improvements.
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| Book value | Asset's acquisition costs less its accumulated depreciation (or depletion, or amortization); also sometimes used synonymously as the carrying value of an account.
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| Capital expenditures | Additional costs of plant assets that provide material benefits extending beyond the current period; also called balance sheet expenditures.
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| Change in an accounting estimate | Change in an accounting estimate that results from new information, subsequent developments, or improved judgment that impacts current and future periods.
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| Copyright | Right giving the owner the exclusive privilege to publish and sell musical, literary, or artistic work during the creator's life plus 70 years.
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| Cost | All normal and reasonable expenditures necessary to get an asset in place and ready for its intended use.
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| Declining-balance method | Method that determines depreciation charge for the period by multiplying a depreciation rate (often twice the straight-line rate) by the asset's beginning-period book value.
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| Depletion | Process of allocating the cost of natural resources to periods when they are consumed and sold.
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| Depreciation | Expense created by allocating the cost of plant and equipment to periods in which they are used; represents the expense of using the asset.
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| Extraordinary repairs | Major repairs that extend the useful life of a plant asset beyond prior expectations; treated as a capital expenditure.
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| Franchises | Privileges granted by a company or government to sell a product or service under specified conditions.
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| Goodwill | Amount by which a company's (or a segment's) value exceeds the value of its individual assets less its liabilities.
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| Impairment | Diminishment of an asset value.
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| Indefinite useful life | Asset life that is not limited by legal, regulatory, contractual, competitive, economic, or other factors.
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| Intangible assets | Long-term assets (resources) used to produce or sell products or services; usually lack physical form and have uncertain benefits.
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| Land improvements | Assets that increase the benefits of land, have a limited useful life, and are depreciated.
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| Lease | Contract specifying the rental of property.
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| Leasehold | Rights the lessor grants to the lessee under the terms of a lease.
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| Leasehold improvements | Alterations or improvements to leased property such as partitions and storefronts.
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| Lessee | Party to a lease who secures the right to possess and use the property from another party (the lessor).
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| Lessor | Party to a lease who grants another party (the lessee) the right to possess and use its property.
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| Licenses | (See franchises.)
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| Modified Accelerated Cost Recovery System (MACRS) | Depreciation system required by federal income tax law.
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| Natural resources | Assets physically consumed when used; examples are timber, mineral deposits, and oil and gas fields; also called wasting assets.
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| Ordinary repairs | Repairs to keep a plant asset in normal, good operating condition; treated as a revenue expenditure and immediately expensed.
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| Patent | Exclusive right granted to its owner to produce and sell an item or to use a process for 17 years.
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| Plant assets | Tangible long-lived assets used to produce or sell products and services; also called property, plant and equipment (PP&E) or fixed assets.
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| Plant asset age | Estimated by dividing accumulated depreciation by depreciation expense.
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| Plant asset useful life | Equals the plant asset cost divided by depreciation expense. It is the length of time an asset will be productively used in the operations of a business.
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| Revenue expenditures | Expenditures reported on the current income statement as an expense because they do not provide benefits in future periods.
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| Salvage value | Estimate of amount to be recovered at the end of an asset's useful life; also called residual value or scrap value.
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| Straight-line depreciation | Method that allocates an equal portion of the depreciable cost of plant asset (cost minus salvage) to each accounting period in its useful life.
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| Total asset turnover | Measure of a company's ability to use its assets to generate sales; computed by dividing net sales by average total assets.
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| Trademark | or
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| trade (brand) name | Symbol, name, phrase, or jingle identified with a company, product, or service.
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| Units-of-production depreciation | Method that charges a varying amount to depreciation expense for each period of an asset's useful life depending on its usage.
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| Useful life | Length of time an asset will be productively used in the operations of a business; also called service life.
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