Question

Let's begin by talking about plant assets. Can you tell us what kind of plant assets are used in your company or place of business? Do you have an estimate of the amount invested in those plant assets?

Answer 1

PLANT ASSETS :- A plant asset is an asset with a useful life of more than one year that is used in producing revenues in a business's operations. Examples of plant assets include land, land improvements, buildings, machinery and equipment, office equipment, furniture, fixtures, vehicles, leasehold improvements, and construction work-in-progress. Plant assets are also referred to as fixed assets and/or property, plant and equipment.

Plant assets are recorded at cost and depreciation is reported during their useful lives. (However, there is no depreciation of land, and the depreciation for construction work-in-progress begins when the asset is placed into service.) The cumulative amount of depreciation is reported in the contra plant asset account Accumulated Depreciation.

Plant assets and the related accumulated depreciation are reported on a company's balance sheet in the noncurrent asset section entitled property, plant and equipment. Accounting rules also require that the plant assets be reviewed for possible impairment losses.

-->> kind of plant assets are used in your company or place of business ::-

the answer will undoubtedly vary slightly depending on the type and size of a business. Plant assets are items or expenses that have been necessary in order to set up the business and allow it to function as a business. What may be deemed necessary for one business may not be the case for another.

Some plant assets may include the following examples:

• In a restaurant, this may include purchasing catering equipment for the kitchen including an oven and fryer for example. The business owner would also need to buy tables and chairs for paying customers.

• In a gym, this would include all the fitness equipment including the rowers and treadmills. It may also include changing room facilities with lockers and showers.

• In an agricultural or farm setting, this will include the actual land where the animals are kept or the crops are grown. It may include the barns for housing the animals and any other machinery needed to work the land.

When a company acquires a plant asset, accountants record the asset at the cost of acquisition (historical cost). When a plant asset is purchased for cash, its acquisition cost is simply the agreed on cash price. This cost is objective, verifiable, and the best measure of an asset’s fair market value at the time of purchase. Fair market value is the price received for an item sold in the normal course of business (not at a forced liquidation sale). Even if the market value of the asset changes over time, accountants continue to report the acquisition cost in the asset account in subsequent periods.