LAND LAND IMPROVEMENTS BUILDING

Purchase Price Fences If Purchased

Legal fees (for the Title)
Broker/ Agent Commission
Escrow fee
Special assessments
Registration and transfer of title fee
Cost of relocation/reconstruction
Mortgages, interest and lien
assumed
Unpaid taxes up to DOA if assumed
Cost of survey
Cost of subdividing
Payments to tenants (to vacate)
Cost of permanent improvements:
o Cost of clearing
o Cost of grading
o Cost leveling
o Cost landfill
Cost of option to buy (if acquired)
Water systems Purchase Price
Drainage systems Legal fees
Sidewalks Unpaid taxes up to DOA if assumed
Pavements Mortgages, interest and lien assumed
Cost of landscaping: Payments to tenants (to vacate)
o Cost of trees Renovating/remodeling cost:
o Cost of shrubs o Lighting installation
Cost of Permanent fences o Partitions
Expenditures for sidewalks, pavements, parking lots o Repairs
and driveways (if not connected to new building) If Constructed
Materials, Labor and Overhead
Building permit/license
Architect fee
Superintendent fee
Cost of excavation
Cost of temporary buildings
o For construction offices
o For tools/materials shed
Expenditures during construction
o Interest on construction loans
o Cost of Insurances
o Permanent (part) equipment and fixtures
Cost of Temporary fence (and removal also)
Safety inspection fee
Expenditures for sidewalks, pavements, parking lots and
driveways (if part of blueprint)

1. Cash Basis
2. On Account subject to Discount
3. Installment Basis
4. Issuance of Share Capital
5. Issuance of Bonds Payable
6. Exchange
ACQUISITION OF PROPERTY
Cost = Cash price equivalent at date of recognition + directly attributable cost
*If several assets at Lump sum price, apportion on the basis of relative fair value
Cost = Invoice price Discount (whether taken or not)
*If not taken charged to Purchase Discount Lost (Other expense)
a. Cash Price is available
Cost = Cash Price
*Excess of Installment price over Cash price, (Discount) is treated as Interest expense as amortized over the credit period
b. No available Cash Price
Cost = Present Value of all payments using Implied Interest Rate
Order of Priority
a. Fair value of Property Received
b. Fair value of the Share Capital
c. Par value or Stated value of the Share Capital
Order of Priority
a. Fair value of Bonds Payable
b. Fair value of Asset received
c. Face amount of Bonds Payable
General Rule: Cost = Fair Value
Exception: @ Carrying Amount if
Lacks commercial substance
FV of asset given and/ received is not reliably measurable
*Commercial Substance CF of asset received differ significantly from the CF od asset transferred (Timing, Amount, Risk)
a. No cash is involved (with Commercial Substance)
Order of Priority
i. FV of property given
ii. FV of property received
iii. Carrying amount of property given
*any gain or loss is fully recognized
b. Cash is involved (with Commercial Substance)
Payor Recipient
FV of asset given + Cash Payment FV of asset given Cash Received
Fair Value of asset given
Less: Carrying Amount
Gain/Loss on Exchange
c. Cash is involved (w/o Commercial Substance)
Payor Recipient
Carrying Amount of asset given + Cash Payment Carrying Amount of asset given Cash Received
*No gain or loss is recognized.
 7. Trade in Order of Priority
a. Fair value of asset given + Cash Payment
Cash Payment = List Price Trade in Value
Fair Value of asset given
Less: Carrying Amount
Gain/Loss on Exchange
b. Trade in value of asset given + Cash Payment (In effect, the sum is the FV of asset received)
Trade in Value of asset given
Less: Carrying Amount
Gain/Loss on Exchange
8. Donation (Government Grant Contributions received from shareholders @ Fair Value
Cr. Donated Capital
Expenses incurred in connection with the donation (Registration and Legal fees)
Dr. Donated Capital
Directly attributable cost Capitalized
Capital gifts from Nonshareholders:
a. If subsidies, @ FV when received or receivable Recognized as Income
b. If not, Cr. to a Liability account, then transferred to Income (if initial restrictions are met)
9. Construction Cost = Direct cost of materials + Direct cost of labor + Indirect cost and incremental overhead

SAVING OR LOSS ON CONSTRUCTION

Actual cost of Construction < Purchase Price of Constructed Asset = Savings (Not Income)
*Any Internal Profit is eliminated in Cost of Self Constructed Asset
Actual cost of Construction > Purchase Price of Constructed Asset = Difference (Not Loss) General Rule
Exception: If materially excessive, treat as a loss.
*Constructed Asset is recorded at Actual Cost
*Cost of abnormal amount of wasted MLO is not included in the cost of the asset.

INTERVENING OPERATIONS
*Income and expenses related to incidental operation are recognized in P/L.

DERECOGNITION
Derecognized on/when:
On disposal
when no future economic benefits are expected from the use disposal
*Gain/loss on derecognition is included in P/L
Gain/Loss = Net Disposal Proceeds Carrying Amount
MAJOR CHARACTERISTICS OF PPE Cost incurred while an item capable of operation is operated at less
1. Tangible assets than full capacity
2. Used in business Initial operating losses
3. Expected to be used over a period of more than one year Cost of relocating or reorganizing part or all of entitys operation
4. Classified as noncurrent assets
MEASUREMENT AFTER RECOGNITION
RECOGNITION Choose either
1. Probable flow of future economic benefit Cost model Revaluation model
2. Cost can be measured reliably Cost Accu. Depre. Accu. Impair. FV @ Rev. Sub. Accu. Depre. & Impair.

SPARE PARTS AND SERVICING EQUIPMENT FULLY DEPRECIATED PROPERTY

General rule: An inventory When:
Exception: qualify as PPE if Carrying amount is = 0
1. A major spare parts and stand by equipment Carrying amount is = Residual Value
2. To be use for more than one period *Disclosure of fully depreciated property is encouraged.
3. Used in connection with an item of PPE
Useful life: SHORTER of useful life and useful life of related asset PROPERTY CLASSIFIED AS HELD FOR SALE
If:
MEASUREMENT AT RECOGNITION Asset is available for immediate sale in the present condition within 1
@ COST = cash or cash equivalent paid + FV of consideration given year from the date of classification as held for sale.
*The asset shall be excluded PPE
ELEMENT OF COST *It is presented as Current Asset
1. Purchase price Add: Import duties and Nonrefundable *Measured @ Lower of Carrying Amount or Fair Value Cost of Disposal
purchase taxes *It is not depreciated
Less: Trade discounts and Rebates
2. Directly attributable Cost of employee benefits IDLE/ABANDONED PROPERTY
cost Cost of site preparation *Not classified as Held for Sale
Initial delivery and handling cost *Still subject to depreciation
Installation and assembly cost
Professional fees OPTIONAL DISCLOSURES
Cost of testing (less samples produced a. Carrying amount of Temporarily idle PPE
3. Cost of dismantling and removing the item and restoring the site b. Gross carrying amount of fully depreciated PPE
c. Carrying amount of PPE retired from active use and classified as Held for
COST NON QUALIFYING FOR RECOGNITION Sale
Cost of opening a new facility d. When cost model is used, the FV of PPE when materially different from
Cost of introducing a new product or service ( advertising & promotion) the carrying amount.
Cost of conducting business in a new location/customer (staff training)
Administration and other general overhead cost

Recognition and Measurement
Classifications
Journal Entries
Grant Related to Depreciable
Grant Related to NonDepreciable
Grant as Compensation for
expenses or losses already
incurred/for financial support
Presentation
Repayment of Government Grant
GOVERNMENT GRANT
Conditions on Recognition:
I. The entity will comply with the conditions attaching to the grant
II. The grant will be received
III. Recognized on Systematic Basis
a. Related to Asset with the condition of either purchase, construct or acquire long term asset
b. Related to Income
a. Receipt of grant
Cash
Deferred grant income
b. Recognized income
Deferred grant income
Grant income
c. Record expenses incurred
Expense
Cash
Grant income = Deferred Grant Income/Useful Life
Grant income = Deferred Grant Income/Useful Life
Recognized as Income when become receivable.
I. Related to Asset
a. Deferred Income Approach
b. Deduction from Asset Approach
II. Related to Income
a. Other Income Approach
b. Deduction from related expense Approach
Accounted for as Change in Accounting Estimate
a. Related to asset recorded by increasing the carrying amount of the Asset
b. Related to income order of application
i. Applied first against any unamortized deferred income
ii. Excess shall be recognized immediately as expense
*Cumulative additional depreciation that would have been recognized to date in the absence of grant shall be recognized
immediately as an expense.