Question

a. Identify the section that addresses depreciation. The number must be formatted as: XXX-XX-XX (Hint: Property, Plant and Equipment)1pts

                                   

b.   How does the FASB codification define depreciation accounting? 1pts

                       

c. According to the website, what is GAAP’s policy regarding depreciating a long-lived asset while it is classified as held for sale? 2pts

  

Answer 1

Question A: Identify the section that addresses depreciation. The number must be formatted as: XXX-XX-XX. (Hint: Property, Plant and Equipment)1pts

Answer: - “ASC 360 – 10”

Brief Overview;

• ASC 360, Property, Plant, and Equipment

ASC 360 includes two Subtopics i.e Overall and Real Estate Sales.

Below is an overview of each Subtopic.

• 360-10 Overall

ASC 360-10 provides guidance on accounting for property, plant, and equipment, and the related accumulated depreciation on these assets.

• 360-20 Real Estate Sales

This section provides accounting guidance for the sale of real estate other than retail land.

Question B: How does the FASB codification define depreciation accounting?

FASB defines “depreciation accounting is a process of allocation, not of valuation”. FASB describes “depreciation accounting as an expense resulting from systematic and fair allocation of the cost of productive facilities or other tangible capital assets, deducting any salvage value (if available), equitably to the periods while services were/are obtained from the use of these asset during its useful life”.

Hope this clarifies;