Object Classification

Land used as a plant site Property, plant and equipment
Land held for a currently undetermined use Investment property
Land held definitely as a future plant site Property, plant and equipment
Land held for long-term capital appreciation Investment property
Land held for current sale (real estate
developer)
Current Asset – Inventory
Land improvements additions to cost not
subject to depreciation
(cost of surveying, clearing, grading, levelling,
landfill, subdividing)
Land
Land improvements subject to depreciation
(depreciated over useful life)
Land Improvements
Special assessments – taxes paid by
landowner as a contribution to cost of public
improvements
Land
Real property taxes Expense
Unpaid real property taxes Building (Capitalized to date of acquisition)
Sidewalks, pavements, parking lot, driveways
– Part of Blueprint
Building
Sidewalks, pavements, parking lot, driveways
– not in connection of new building
Land Improvements
Cost of insurance (Building) Building
Payment for damages Expense
Building fixtures – immovable Building
Building fixtures – movable Furniture and Fixtures, depreciated
Ventilating system, lighting system, elevator –
installed during construction
Building
Ventilating system, lighting system, elevator –
not installed during construction
Building Improvements (depreciated over UL
or remaining life of building, shorter)
Land + Building - Single Cost Relative fair value
Land + Old building to be razed Land
Cost of razing old building – salvage value Land
Payment to tenants (Building owned by entity
leased to tenants and demolished)
 CV (old building) – cost of demolishing
= lost on retirement of old building
New Building
Machinery moved to new location Undepreciated cost of old installation cost –
Expense
New installation cost - Machinery
Removal cost Expense
Value added Tax Input tax (offset against output tax)
Irrecoverable purchase tax Machinery/cost of asset
Tools
 Machine tools – operation of machine
 Hand tools – not used
Tools
Patterns and dies
- Designing or forging out particular
product
Regular products – Asset
Specially ordered products – Expense (cost of
special product)
Motor vehicle registration Expense
Returnable containers – Big units/great bulk Property, plant and Equipment
Returnable containers – Small and individually
small amounts
Noncurrent Assets
Returnable containers – Not returnable Expense
Cost of Addition Capitalized, depreciated over useful life
Cost of Expansion Capitalized, depreciated over useful life or
remaining life of asset, shorter
Improvements or betterments Capitalized
Improvements or betterments – no
replacement
Cost of existing asset
Extraordinary repairs Capitalized
Ordinary repairs Expense
Repair and maintenance Repair and maintenance
Repair and maintenance – day to day
servicing
Profit or loss
Rearrangement cost
 Undepreciated cost of original
installation cost – Expense
 Accumulated depreciation - Cancelled
Capitalized, amortized over remaining life
Major Replacement – separately identifiable Asset