Accounting for Fixed Assets

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Wiley, Mar 22, 1994 - Business & Economics - 232 pages
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In a time of crumbling infrastructure, rising replacement costs, and a dwindling supply of capital, it is necessary to maximize the benefits of investment in long-term tangible assets. To achieve this, company managers and financial officers must change the way they think about property, plant and equipment. No longer can fixed assets simply be put in place and forgotten until they can be depreciated at tax time. A company's profitability can be greatly enhanced by the careful management, control, and measurement of fixed assets.

The only book of its kind, Accounting for Fixed Assets is an authoritative source of advice and analysis on fixed-asset accounting. It offers an exhaustive explanation of the Institute of Management Accountants' statement on management accounting, Property, Plant and Equipment, by one of the statement's principal authors, Raymond H. Peterson.

Central to the book is a complete reevaluation of issues once considered "cut and dry," but now subject to considerable debate. These issues include capitalization, amortization, depreciation, taxes, and fixed-asset inventory. This book offers a thorough presentation of all topics in fixed-asset accounting, including:

  • Asset classification
  • Base unit
  • Asset value
  • Asset safeguards
  • Inventories of fixed assets
  • Extraordinary repairs
  • Written policies
  • Self-constructed assets

In addition, there is an extensive examination of special fixed-asset accounting situations in regulated utilities, government agencies, and nonprofit corporations.

For management accountants and controllers, financial managers and public accountants, Accounting for Fixed Assets offers very clear and practical advice-complete with numerous examples and illustrations--on how to get the most out of fixed assets and improve your company's balance sheet.

In the minds of most accounting professionals, everything anyone could possibly need to know about fixed-asset accounting can be gleaned from an introductory course on accounting principles. Nothing could be simpler. When it comes to tangibles, management's philosophy has always been "just put it in place and forget about it." And for accountants, this has always translated into a general accounting practice centering on depreciation. But in a time of crumbling infrastructures, rising replacement costs, and dwindling capital reserves, depreciation alone simply isn't enough to offset the replacement costs. Clearly, the time has come for a thorough new approach to the management of long-term tangible assets. Accounting for Fixed Assets shows you how.

Written by one of the principal authors of the Institute of Management Accountants' comprehensive statement, Property, Plant and Equipment, this book offers accounting professionals complete guidelines to deploying accounting principles designed to maximize the benefits of investments of long-term tangible assets. The first and only exhaustive treatment of the subject, it takes readers right to the heart of the contemporary debate surrounding such "cut and dry" issues as capitalization, amortization, depreciation, taxes, and fixed-asset inventory. Packed with numerous examples and illustrations, this practical book considers crucial topics such as asset classification, base unit, asset value, asset protection in manufacturing, government, regulated utilities, and virtually every type of public and private, profit and nonprofit organization.

The only A-to-Z guide to accounting for fixed assets, Accounting for Fixed Assets is indispensable for management accountants and controllers, as well as financial managers, corporate officers, and public accountants.

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Contents

What Is Accounting for Fixed Assets?
1
What Is an Asset?
11
Classifications of Asset Transactions
27
Copyright

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About the author (1994)

RAYMOND H. PETERSON is a senior partner at Ray Peterson & Associates, a consulting firm located in Petaluma, California, which specializes in accounting systems for small businesses and nonprofit organizations. Formerly he was Director of Financial Accounting at Pacific Bell, Division Manager with Bell Communications Research, and a district manager in charge of accounting standards at Pacific Telephone and Telegraph Company. From 1985 to 1988, Mr. Peterson served as Director of the Institute of Management Accountants, and he continues to serve as a member of the IMA's Subcommittee on Management Accounting Statement Promulgation. Mr. Peterson holds a master's degree in management from Golden Gate University.

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