Property, Plant, & Equipment
At least 3 examples of property, plant, and equipment (PP&E)
What are land, buildings, equipment, furniture, fixtures, or automobiles?
This principle dictates that acquired assets should be recorded at their actual costs.
What is the cost principle?
This distinguishes capital expenditures from revenue expenditures.
What is capital expenditures increase the asset’s capacity, efficiency, or extend its useful life?
By providing insights into geographical information, vacancy rates, and tenant mix.
How can data analytics assist companies with property management?
This is depreciation and the purpose it serves.
What is depreciation matches the expense against the revenue generated from using an asset?
This is how the cost of a plant asset is allocated over its useful life.
What is through depreciation, following the matching principle?
The historical cost of a plant asset represents this.
What is the amount paid for the asset?
Expenses incurred to maintain the asset in working order.
What are revenue expenditures?
This is the role that weather data plays in property management.
How does weather data helps companies plan maintenance ordering and scheduling?
Capitalized cost, estimated useful life, and estimated residual value.
What are the factors considered in computing depreciation?
This distinguishes plant assets from other assets.
What are long-term assets, lasting several years?
What are land improvements, and are they subject to depreciation?
They are separate plant assets and are subject to depreciation.
Repairs that extend the asset’s useful life.
What are extraordinary repairs in the context of capital expenditures?
By gathering information on energy and water consumption.
How can data analytics help companies understand resource consumption in buildings?
Straight-line method, units-of-production method, double-declining-balance method.
What are the three commonly used depreciation methods?
This constitutes the cost of land.
What is purchase price, brokerage commission, survey and legal fees?
This constitutes the cost of constructing a building.
What are architectural fees, building permits, and contractor charges?
It's used to allocate the total cost of a lump-sum purchase among its assets.
What is the relative-market-value method used for?
They can seek out ways to save energy and be notified of abnormal consumption.
What can companies do with data on resource consumption?
It allocates an equal amount of depreciation to each year, using the formula: (Cost - Residual value) / Useful life.
How is the straight-line depreciation method calculated?
It includes the purchase price, transportation charges, insurance, sales tax, etc.
How is the cost of machinery and equipment determined?
This is a lump-sum purchase and how its cost is allocated.
What is when a company buys several assets as a group, and the cost is allocated based on relative fair market values?
By dividing the total cost paid among the assets according to their relative fair market values.
How do companies identify the cost of each asset in a lump-sum purchase?
It provides insights for maximizing profits and optimizing resource usage.
What benefits does data analytics offer in property management?
This depreciation method is what the IRS requires for tax purposes.
What is the Modified Accelerated Cost Recovery System (MACRS)?