{"id":546,"date":"2022-07-14T08:25:29","date_gmt":"2022-07-14T08:25:29","guid":{"rendered":"http:\/\/vietdubai.com\/?p=546"},"modified":"2024-02-06T13:23:16","modified_gmt":"2024-02-06T13:23:16","slug":"what-is-a-plant-asset-example-and-more","status":"publish","type":"post","link":"http:\/\/vietdubai.com\/bookkeeping\/what-is-a-plant-asset-example-and-more\/","title":{"rendered":"What Is A Plant Asset? Example and More"},"content":{"rendered":"
Plant assets are an integral part of a company\u2019s long-term operations, and their management and accounting play a crucial role in the overall financial health and performance of a business. Assets such as equipment, machinery, buildings, vehicles, and more are assets commonly described as property, plant, and equipment (PP&E). Items labeled as PP&E are tangible, fixed, and not easy to liquidate.<\/p>\n
PP&E is listed on a company’s balance sheet by adding its value minus accumulated depreciation. PP&E provides key functionality to help generate economic value to a company. For example, a company that needs to deliver its products gains value through the use of delivery vehicles, which would be considered PP&E.<\/p>\n
Here we will use all 4 methods to calculate the machine\u2019s depreciation. My Accounting Course is a world-class educational resource developed by experts to simplify accounting, finance, & investment analysis topics, so students and professionals can learn and propel their careers. https:\/\/accounting-services.net\/<\/a> Below is a portion of Exxon Mobil Corporation’s (XOM) quarterly balance sheet from Sept. 30, 2018. The same process will be repeated every year at the end of the financial year. Mary Girsch-Bock is the expert on accounting software and payroll software for The Ascent.<\/p>\n Plant assets, also known as fixed assets, are tangible assets that are used in the production process or to generate revenue for a company over an extended period of time. These assets are not meant for resale and are expected to provide economic benefits for several years. Although PP&E are noncurrent assets or long-term assets, not all noncurrent assets are property, plant, and equipment. Intangible assets are nonphysical assets, such as patents and copyrights. They are considered to be noncurrent assets because they provide value to a company but cannot be readily converted to cash within a year. Long-term investments, such as bonds and notes, are also considered noncurrent assets because a company usually holds these assets on its balance sheet for more than one fiscal year.<\/p>\n The PP&E account is often denoted as net of accumulated depreciation. This means that if a company does not purchase additional new equipment (therefore, its capital expenditures are zero), then Net PP&E should slowly decrease in value every year due to depreciation. The expected useful life of the machine is 7 years, and the salvage (scrap) value after 7 years will be $50,000.<\/p>\n For example, an auto manufacturer’s production facility would be labeled a noncurrent asset. Noncurrent assets may be subdivided into tangible and intangible assets\u2014such as fixed and intangible assets. It is important for a company to maintain a certain level of inventory to run its business, but neither high nor low levels of inventory are desirable.<\/p>\nWhat Are Noncurrent Assets?<\/h2>\n
Acquisition of Plant Assets<\/h2>\n