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expense recognition (depreciation (accounting method (depreciation…
expense recognition
depreciation
long-lived asset
1 year
economic benefit
accounting method
depreciation
equipment
methods
straight-line
allocate cost
calculat
useful life
residual value
accelerated method
more cost in the early years
IFRS doesnt say which one use
depend on pattern
amortization
financial intrument
lease conrtacts
impairment
goodwill
NO
excess depreciation
no hidden reserve!
warranties
future expenses
not know in advance
approach
wait until actual expenses
reflet expense
not timely!!
matching principle
estimate amount
future expenses
from warranties
estimate warranty expense
provision
update
life of warranty
period
economic benefits
expenditure
matching principle
report expense
in period related
revenues earned
doubtful accounts
CC will default
direct write off method
wait until a customer default
to recognize the loss
<-- too late
not contient
accounting standards
loans
receivables
IFRS 9
FAS 5/114/118
initial recognition
amortized cost
subsequent measurement
possible impairmment