2. An ASSET is a resource controlled by
the enterprise as a result of past
events and from which future
economic benefits are expected to
flow to the enterprise.
5. Current assets:
1. Cash and cash equivalents
2. Short-term investments
3. Receivables
4. Inventory
5. Prepaid expenses
6. The RESIDUAL VALUE of an asset is the
estimated amount that the entity could
now get on disposal or disposition of
assets by another means, after deducting
the estimated costs of such sale or
disposition, if the assets had already
reached the age and other conditions
expected at the end of its useful life.
7. Useful life is the period during which it is
expected to use the depreciable assets by the
entity.
Fair market value is the price that would be
agreed to in an open and unrestricted market
between knowledgeable and willing parties
dealing at arm’s length who are fully
informed and are not under any compulsion
to transact.
Gross book value of a fixed asset is its
historical cost or other amount substituted
for historical cost in the books of account or
financial statements.
Net book value of an asset is basically the
difference between the historical cost of that
asset and it associated depreciation.
8. The cost of the elements of tangible fixed
assets includes:
(a) its purchase price, including import
tariffs and indirect taxes;
(b) the delivery costs ;
(c) the costs of installation and
assembly.
