Beruflich Dokumente
Kultur Dokumente
9-1
Chapter
PLANT AND INTANGIBLE
9 ASSETS
Plant
Plant Assets
Assets
Long-lived
Long-lived assets
assets acquired
acquired for
for use
use in
in
business
business operations.
operations.
Similar to long-term prepaid expenses
Date Description Debit Credit
Major
Major Categories
Categories of
of Plant
Plant Assets
Assets
T a n g ib le P la n t In ta n g ib le N a tu ra l
A s s e ts A s s e ts R e s o u rc e s
L o n g -te rm N o n c u rre n t a s s e ts S it e s a c q u ir e d fo r
a s s e t s h a v in g w it h n o p h y s ic a l e x t r a c t in g v a lu a b le
p h y s ic a l s u b s t a n c e . s u b s ta n c e . re s o u rc e s .
L a n d , b u ild in g s , P a t e n t s , c o p y r ig h t s , O il r e s e r v e s ,
e q u ip m e n t , tra d e m a rk s , t im b e r , o t h e r
fu r n it u r e , fix t u r e s . fr a n c h is e s , g o o d w ill. m in e r a ls .
Accountable
Accountable Events
Events
Acquisition.
Acquisition.
Allocation
Allocation of
of the
the
acquisition
acquisition cost
cost toto
expense
expense over
over the
the
asset’s
asset’s useful
useful life
life
(depreciation).
(depreciation).
Sale
Sale or
or disposal.
disposal.
Acquisition
Acquisition of
of Plant
Plant Assets
Assets
Asset
Asset
price
price
Cost
Cost +
Reasonable
Reasonable and
and
necessary
necessarycosts
costs.. .. ..
......for
forgetting
getting ......for
forgetting
getting
the
theasset
assetto
tothe
the the
theasset
assetready
ready
desired
desiredlocation.
location. for
foruse.
use.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-6
Determining
Determining Cost
Cost
On
On May
May 4,4, Heat
Heat Co.,
Co., an
an Ohio
Ohio maker
maker of of stoves,
stoves,
buys
buys aa new
new machine
machine fromfrom aa Texas
Texas company.
company.
The
The new
new machine
machine has has aa price
price of
of $52,000.
$52,000.
Sales
Sales tax
tax was
was computed
computed at at 8%.
8%.
Heat
Heat Co.
Co. pays
pays $500
$500 shipping
shipping costcost to
to get
get the
the
machine
machine to to Ohio.
Ohio. After
After the
the machine
machine arrives,
arrives,
set-up
set-up costs
costs of
of $1,300
$1,300 areare incurred,
incurred, along
along with
with
$4,000
$4,000 in
in testing
testing costs.
costs.
Compute
Compute the
the cost
cost of
of Heat
Heat Co.’s
Co.’s new
new machine.
machine.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-7
Determining
Determining Cost
Cost
D a te
Date D e sc r i p ti o n
Description Debit
D e b it C
Credit
re d it
May 4 New Machine 61,960
Cash 61,960
Special
Special Considerations
Considerations
Cost
Cost includes
includesreal
real estate
estate
commissions,
commissions, escrow
escrow
Land
Land fees,
fees, legal
legalfees,
fees,clearing
clearing
and
andgrading
gradingthe theproperty.
property.
Improvements
Improvementsto toland
land
Land
Land such
suchasasdriveways,
driveways,
Improvements fences,
fences, and
andlandscaping
landscaping
Improvements are
arerecorded
recordedseparately.
separately.
Special
Special Considerations
Considerations
Repairs
Repairsmade
made prior
prior to
to the
the
building
building being
beingput
put in
inuse
use
Buildings
Buildings are
are considered
consideredpart
part of
of the
the
building’s
building’scost.
cost.
Related
Related interest,
interest,
insurance,
insurance,and
andproperty
property
Equipment taxes
taxesare
aretreated
treatedas
as
Equipment expenses
expensesof of the
thecurrent
current
period.
period.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-10
Special
Special Considerations
Considerations
Allocation
Allocation of
of aa Lump-Sum
Lump-Sum Purchase
Purchase
The
Thetotal
total cost
cost The
Theallocation
allocation
must
must be
be is
isbased
basedon on
allocated
allocatedto to the
therelative
relative
I think I’ll buy the separate
separate Fair
FairMarket
Market
whole thing; barn, accounts
accountsfor for Value
Value of
of each
each
land, and animals. each
each asset.
asset. asset
asset
purchased.
purchased.
Capital
Capital Revenue
Revenue
Expenditure
Expenditure Expenditure
Expenditure
Any
Anymaterial
material expenditure
expenditure Expenditure
Expenditurefor
for
that
that will
will benefit
benefit several
several ordinary
ordinaryrepairs
repairs
accounting
accountingperiods.
periods. and
and maintenance.
maintenance.
To
To capitalize
capitalize an
anexpenditure
expenditure To
Toexpense
expensean
anexpenditure
expenditure
means
meanstotocharge
chargeitit to
toan
an means
meansto
tocharge
chargeititto
toan
an
asset
asset account.
account. expense
expenseaccount.
account.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-12
Depreciation
Depreciation
The
Theallocation
allocationof
of the
thecost
cost of
of aaplant
plant asset
assetto
toexpense
expensein
inthe
the
periods
periodsininwhich
whichservices
servicesare
arereceived
receivedfrom
fromthe
theasset.
asset.
Balance
BalanceSheet
Sheet
Cost of Assets:
Assets:
plant Plant
Plant and
and
assets equipment
equipment
as the services
Income
IncomeStatement
Statement are received
Revenues:
Revenues:
Expenses:
Expenses:
Depreciation
Depreciation
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-13
Depreciation
Depreciation
Book
Book Value
Value
Cost – Accumulated Depreciation
Cost – Accumulated Depreciation
Accumulated
Accumulated Depreciation
Depreciation
Contra-asset
Contra-asset
Represents the
Represents the portion
portion of
of an
an
asset’s
asset’s cost
cost that
that has
has already
already
been
been allocated
allocated to
to expense.
expense.
Causes
Causes of
of Depreciation
Depreciation
Physical deterioration
Physical deterioration
Obsolescence
Obsolescence
Straight-Line
Straight-Line Depreciation
Depreciation
Straight-Line
Straight-Line Depreciation
Depreciation
On
On January
January 1,
1,2003,
2003, Bass
Bass Co.Co. buys
buys aanew
new boat.
boat. Bass
Bass
Co.
Co.pays
pays$24,000
$24,000for
for the
theboat.
boat. The
Theboat
boathas
hasanan
estimated
estimatedresidual
residual value
valueof of$3,000
$3,000and
andan
anestimated
estimated
useful
useful life
lifeofof55 years.
years.
Compute
Compute depreciation
depreciation for
for 2003
2003 using
using the
the
straight-line
straight-line method.
method.
Cost – Residual Value $ 24,000 – $ 3,000
=
Y ears of Useful Life 5
= $ 4,200 per year
Straight-Line
Straight-Line Depreciation
Depreciation
Bass
Bass Co.
Co.will
willrecord
record $4,200
$4,200depreciation
depreciation each
each year
year for
for
five
fiveyears.
years. Total
Totaldepreciation
depreciationover
overthe
theestimated
estimateduseful
useful
life
lifeof
of the
theboat
boat is:
is:
Salvage Value
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-17
Depreciation
Depreciation for
for Fractional
Fractional Periods
Periods
When
When an
an asset
assetis is acquired
acquired during
duringthe
theyear,
year,
depreciation
depreciationin
in the
theyear
year of
of acquisition
acquisition must
must bebe
prorated.
prorated.
½
Half-Year
Half-Year Convention
Convention
In
In the
the year
year of
of
acquisition,
acquisition, record
record six
six
months
months of of depreciation.
depreciation.
Half-Year
Half-Year Convention
Convention
Depreciation
Depreciation == ($75,000
($75,000 -- $5,000)
$5,000) ÷÷ 10
10
== $7,000
$7,000 for
for aa full
full year
year
11
Depreciation
Depreciation == $7,000
$7,000 ×× //22 == $3,500
$3,500
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-19
Declining-Balance
Declining-Balance Method
Method
Depreciation
Depreciation in
in the
theearly
earlyyears
yearsof
of an
an asset’s
asset’sestimated
estimated
useful
useful life
lifeis
ishigher
higherthan
thanin
inlater
lateryears.
years.
Acce le ra te d
De pre cia tion Re m a ining
= × De pre cia tion
Ex pe nse Book Va lue
Ra te
The
Thedouble-declining
double-decliningbalance
balancedepreciation
depreciation
rate
rateis
is200%
200%ofofthe
thestraight-line
straight-line
depreciation
depreciationrate
rateof
of 1/Useful
1/Useful Life.
Life.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-20
Declining-Balance
Declining-Balance Method
Method
On
On January
January 1,
1,2003,
2003, Bass
Bass Co.Co. buys
buys aanew
new boat.
boat. Bass
Bass
Co.
Co.pays
pays$24,000
$24,000for
for the
theboat.
boat. The
Theboat
boathas
hasanan
estimated
estimatedresidual
residual value
valueof of$3,000
$3,000and
andan
anestimated
estimated
useful
useful life
lifeofof55 years.
years.
Compute
Compute depreciation
depreciation for
for 2003
2003 using
using the
the
double-declining
double-declining balance
balance method.
method.
Declining-Balance
Declining-Balance Method
Method
Compute
Total
Compute depreciation
Total depreciation over
overthe
depreciation
depreciation for
for the
theestimated
estimated the rest
useful of
restlife
useful the
ofof
life an
the
of an
asset
asset is
isthe
the same
same using
using either
either the
the straight-line
straight-line method
method or
or
boat’s
boat’s
the
estimated
estimated usefuluseful life.
life.
the declining-balance
declining-balancemethod.
method.
Financial
Financial Statement
Statement Disclosures
Disclosures
Estimates
Estimates of
of Useful
Useful Life
Life and
and
Residual
Residual Value
Value
May differ from company to
May differ from company to
company.
company.
The reasonableness of
The reasonableness of
management’s
management’sestimates
estimatesis
is
evaluated
evaluatedby
byexternal
externalauditors.
auditors.
Principle
Principle of
of Consistency
Consistency
Companies should avoid switching
Companies should avoid switching
depreciation
depreciationmethods
methodsfrom
fromperiod
periodto
to
period.
period.
Revising
Revising Depreciation
Depreciation Rates
Rates
Predicted
Predicted Predicted
Predicted
salvage
salvagevalue
value useful
useful life
life
So
So depreciation
depreciation
is
is an
an estimate.
estimate.
Over
Over the
the life
life of
of an
an asset,
asset, new
new information
information
may
may come
come to to light
light that
that indicates
indicates the
the
original
original estimates
estimates need
need to to be
be revised.
revised.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-24
Revising
Revising Depreciation
Depreciation Rates
Rates
On
On January
January 1,1, 2003,
2003, equipment
equipment was was
purchased
purchased that that cost
cost $30,000,
$30,000, has
has aa useful
useful
life
life of
of 10
10 years
years and
and no
no salvage
salvage value.
value.
During
During 2006,
2006, the
the useful
useful life
life was
was revised
revised to
to 88
years
years total
total (5
(5 years
years remaining).
remaining).
Calculate
Calculate depreciation
depreciation expense
expense for
for the
the year
year
ended
ended December
December 31, 31, 2006,
2006, using
using the
the
straight-line
straight-line method.
method.
Revising
Revising Depreciation
Depreciation Rates
Rates
When
When our
our estimates
estimateschange,
change,
depreciation
depreciation is:
is:
Book value at Salvage value at
date of change – date of change
Impairment
Impairment of
of Assets
Assets
IfIf the
the cost
cost of
of an
an asset
asset
cannot
cannot be be recovered
recovered
through
through future
future use
use oror
sale,
sale, thethe asset
asset should
should
be
be written
written down
down toto its
its
net
net realizable
realizable value.
value.
Disposal
Disposal of
of Plant
Plant and
and Equipment
Equipment
Update
Update depreciation
depreciation
to
to the
the date
date of
of disposal.
disposal.
Journalize
Journalize disposal
disposal by:
by:
Recording
Recordingcashcash Recording
Recordingaa
received
received (debit)
(debit) gain
gain(credit)
(credit)
or
orpaid
paid (credit).
(credit). or
or loss
loss(debit).
(debit).
Removing
Removingaccumulated
accumulated Removing
Removing thethe
depreciation
depreciation(debit).
(debit). asset
assetcost
cost (credit).
(credit).
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-28
Disposal
Disposal of
of Plant
Plant and
and Equipment
Equipment
IfIf Cash
Cash >> BV,
BV, record
record aa gain
gain (credit).
(credit).
IfIf Cash
Cash << BV,
BV, record
record aa loss
loss (debit).
(debit).
IfIf Cash
Cash == BV,
BV, no
no gain
gain or
or loss.
loss.
Recording
Recordingcashcash Recording
Recordingaa
received
received (debit)
(debit) gain
gain(credit)
(credit)
or
orpaid
paid (credit).
(credit). or
or loss
loss(debit).
(debit).
Removing
Removingaccumulated
accumulated Removing
Removing thethe
depreciation
depreciation(debit).
(debit). asset
assetcost
cost (credit).
(credit).
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-29
Disposal
Disposal of
of Plant
Plant and
and Equipment
Equipment
On
On September
September 30, 30, 2003,
2003, Evans
Evans Map Map Company
Company
sells
sells aa machine
machine that
that originally
originally cost
cost $100,000
$100,000 for
for
$60,000
$60,000 cash.
cash. The
The machine
machine was was placed
placed in
in
service
service onon January
January 1, 1, 1998.
1998. ItIt has
has been
been
depreciated
depreciated using
using the
the straight-line
straight-line method
method with
with
an
an estimated
estimated salvage
salvage value
value ofof $20,000
$20,000 and
and an
an
estimated
estimated useful
useful life
life of
of 10
10 years.
years.
Let’s
Let’s answer
answer the
the following
following questions.
questions.
Disposal
Disposal of
of Plant
Plant and
and Equipment
Equipment
The
The amount
amount of
of depreciation
depreciation
recorded
recorded on
on September
September 30,30, 2003,
2003,
to
to bring
bring depreciation
depreciation up
up to
to date
date is:
is:
a.
a. $8,000.
$8,000. Annual Depreciation:
($100,000 - $20,000) ÷ 10 Yrs. = $8,000
b.
b. $6,000.
$6,000.
c.
c. $4,000.
$4,000. Depreciation to Sept. 30:
d. 9/12 × $8,000 = $6,000
d. $2,000.
$2,000.
Disposal
Disposal of
of Plant
Plant and
and Equipment
Equipment
After
After updating
updating the
the depreciation,
depreciation, the
the
machine’s
machine’s book
book value
value on
on
September
September 30,
30, 2003,
2003, is:
is:
a.
a. $54,000.
$54,000. Cost $ 100,000
Accumulated Depreciation:
b.
b. $46,000.
$46,000. (5 yrs. × $8,000) + $6,000 = 46,000
c.
c. $40,000.
$40,000. Book Value $ 54,000
d.
d. $60,000.
$60,000.
Disposal
Disposal of
of Plant
Plant and
and Equipment
Equipment
The
The machine’s
machine’s sale
sale resulted
resulted in:
in:
a.
a. aa gain
gain of
of $6,000.
$6,000.
b.
b. aa gain
gain of
of $4,000.
$4,000.
c.
c. aa loss
loss of
of $6,000.
$6,000.
d.
d. aa loss
loss of
of $4,000.
$4,000. Cost $ 100,000
Accum. Depr. 46,000
Book value $ 54,000
Cash received 60,000
Gain $ 6,000
Airplane
Airplane Truck
Truck
for
for for
for
Airplane
Airplane Airplane
Airplane
Only
Only situations
situations where
where cash
cash
is
is paid
paid will
will be
be demonstrated.
demonstrated.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-34
Trading
Trading in
in Used
Used Assets
Assets
for
for New
New Ones
Ones
Dissimilar Similar Assets
Assets and Cash Paid
Recognize
Yes No
Gains?
Recognize
Yes Yes
Losses?
SIMILAR
Cost $ 40,000
a.
a. gain
gain of
of $6,000.
$6,000. Accum. Depr. 30,000
b.
b. loss
loss of
of $6,000.
$6,000. Book Value $ 10,000
Fair Value 4,000
c.
c. loss
loss of
of $4,000.
$4,000. Loss $ 6,000
d.
d. gain
gain of
of $4,000.
$4,000.
Prepare a journal entry
to record the exchange.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-37
Trading
Trading in
in Used
Used Assets
Assets
for
for New
New Ones
Ones –– Similar
Similar Assets
Assets
Prepare
Prepare the
the journal
journal entry
entry to
to record
record
the
the trade.
trade.
Intangible
Intangible Assets
Assets
Noncurrent
Noncurrent assets
assets Often
Oftenprovide
provide
without
without physical
physical exclusive
exclusiverights
rights
substance.
substance. or
orprivileges.
privileges.
Characteristics
Characteristics
Useful
Usefullife
lifeis
is Usually
Usually acquired
acquired
often
often difficult
difficult for
for operational
operational
to
todetermine.
determine. use.
use.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-39
Intangible
Intangible Assets
Assets
Record at
current cash Patents
equivalent
cost, including
Copyrights
purchase Leaseholds
price, legal Leasehold
fees, and filing Improvements
fees.
Goodwill
Trademarks
and
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-40
Intangible
Intangible Assets
Assets
Amortize
Amortize over
over shorter
shorter of
of economic
economic
life
life or
or legal
legal life,
life, subject
subject to
to aa maximum
maximum
of
of 40
40 years.
years.
Use
Use straight-line
straight-line method.
method.
Research
Research and
and development
development costs
costs are
are
normally
normally expensed
expensed as
as incurred.
incurred.
Intangible
Intangible Assets
Assets –– Goodwill
Goodwill
Goodwill
Goodwill
Occurs
Occurs when
when one
one Only
Only purchased
purchased
company
company buys
buys goodwill
goodwill is
is an
an
another
another company.
company. intangible
intangible asset.
asset.
The
The amount
amount by
by which
which the
the
purchase
purchase price
price exceeds
exceeds the
the fair
fair
market
market value
value of
of net
net assets
assets acquired.
acquired.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-42
Intangible
Intangible Assets
Assets –– Goodwill
Goodwill
Eddy
Eddy Company
Company paid paid $1,000,000
$1,000,000 to
to
purchase
purchase all
all of
of James
James Company’s
Company’s assets
assets
and
and assumed
assumed liabilities
liabilities of
of $200,000.
$200,000. The
The
acquired
acquired assets
assets were
were appraised
appraised at
at aa fair
fair
value
value ofof $900,000
$900,000..
Intangible
Intangible Assets
Intangible Assets ––– Goodwill
Assets Goodwill
Goodwill
What
What amount
amount of
of goodwill
goodwill should
should be
be
recorded
recorded on
on Eddy
Eddy Company
Company books?
books?
F M V o f A sse ts $ 900,000
a.
a. $100,000.
$100,000. D e b t A ssu m e d 200,000
F M V o f N e t A sse ts $ 700,000
b.
b. $200,000.
$200,000. P u rch a se P rice 1,000,000
G o o d w ill $ 300,000
c.
c. $300,000.
$300,000.
d.
d. $400,000.
$400,000.
Intangible
Intangible Assets
Assets –– Patents
Patents
Exclusive
Exclusive right
right granted
granted
by
by federal
federal government
government to to sell
sell or
or
manufacture
manufacture an an invention.
invention.
Cost
Cost is
is purchase
purchase Amortize
Amortize costcost
price
price plus
plus legal
legal over
over the
the shorter
shorter of
of
cost
cost to
to defend.
defend. useful
useful life
life or
or 17
17 years.
years.
Intangible
Intangible Assets
Assets ––
9-45
Trademarks
Trademarks and
and Trade
Trade Names
Names
A
A symbol,
symbol, design,
design, or
or logo
logo
associated
associated with
with aa business.
business.
Purchased
Internally trademarks
developed are recorded
trademarks at cost, and
have no amortized over
recorded shorter of legal
asset cost. or economic life,
or 40 years.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-46
Intangible
Intangible Assets
Assets –– Franchises
Franchises
Legally
Legally protected
protected right
right to
to sell
sell products
products
or
or provide
provide services
services purchased
purchased by by
franchisee
franchisee from
from franchisor.
franchisor.
Purchase
Purchase price
price is
is intangible
intangible asset
asset
which
which is
is amortized
amortized over
over the
the shorter
shorter of
of
the
the protected
protected right
right oror 40
40 years.
years.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-47
Intangible
Intangible Assets
Assets –– Copyrights
Copyrights
Exclusive
Exclusive right
right granted
granted by
by the
the
federal
federal government
government to to protect
protect
artistic
artistic or
or intellectual
intellectual properties.
properties.
Legal
Legal life
life is
is Amortize
Amortize cost
cost
life
life of
of creator
creator over
over aa period
period not
not
plus
plus 5050 years.
years. to
to exceed
exceed 40
40 years.
years.
Natural
Natural Resources
Resources
Total
Total cost,
cost, Extracted
Extracted from
from
including
including the
the natural
natural
exploration
exploration and
and environment
environment
development,
development, and
and reported
reported
is
is charged
charged to
to at
at cost
cost less
less
depletion
depletion expense
expense accumulated
accumulated
over
over periods
periods depletion.
depletion.
benefited.
benefited.
Examples:
Examples: oil,
oil, coal,
coal, gold
gold
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-49
Depletion
Depletion of
of Natural
Natural Resources
Resources
Depletion
Depletion of
of Natural
Natural Resources
Resources
Cost
Cost of
of
Total goods
goodssold
sold
Total Inventory
depletion Inventory
depletion for
cost forsale
sale
cost Unsold
Unsold
Inventory
Inventory
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-51
Depletion
Depletion of
of Natural
Natural Resources
Resources
The
The Units-of-Output
Units-of-Output Method
Method
MACRS:
MACRS: The
The “Tax
“Tax Method”
Method”
MACRS == M
MACRS odified A
Modified ccelerated C
Accelerated ost R
Cost ecovery S
Recovery System
ystem
Based
Basedonon The
Theonly
onlyaccelerated
acceleratedmethod
method
Declining-
Declining- allowed
allowedbybythe
theIRS
IRSwhen
when
Balance
Balance computing
computing depreciation
depreciationfor
fortax
tax
Methods
Methods return
returnpurposes.
purposes.
Asset
Asset Cost
Cost ×× MACRS
MACRSraterate
Rates
Ratesare
areavailable
availablefrom
fromtables
tables
provided
providedbybythe
theIRS.
IRS.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Slide
9-54
Which
Which Depreciation
Depreciation Methods
Methods
Do
Do Most
Most Businesses
Businesses Use?
Use?
A survey of 600 Publicly Owned Corporations
Straight-line 563
Declining-balance 44
Sum-of-the-years'-digits 11
Units-of-output 53
Other 9
End
End of
of Chapter
Chapter 99