Glossary: M07 Long-Term Assets

TermDefinition
Property, Plant and Equipment (PPE)Tangible assets used in operations with useful lives exceeding one year
Historical CostOriginal acquisition cost including all costs to bring asset to intended use
CapitalizationRecording an expenditure as an asset rather than an expense
DepreciationSystematic allocation of a tangible asset’s depreciable amount over its useful life
Straight-Line DepreciationEqual depreciation expense each period: (Cost - Salvage) / Useful Life
Double-Declining Balance (DDB)Accelerated method: 2/n times beginning book value
Units-of-ProductionDepreciation based on actual usage or output relative to total estimated capacity
Salvage (Residual) ValueEstimated value of asset at end of useful life
Useful LifePeriod over which the asset is expected to provide economic benefits
Component DepreciationDepreciating each significant component of an asset separately; required under IFRS
Intangible AssetNon-monetary asset without physical substance; identifiable and controlled by entity
Finite-Life IntangibleIntangible asset with determinable useful life; amortized over that life
Indefinite-Life IntangibleIntangible asset with no foreseeable limit to its useful life; not amortized, tested for impairment
AmortizationSystematic allocation of an intangible asset’s cost over its useful life
GoodwillUnidentifiable intangible asset from business combination; purchase price minus fair value of net assets
ImpairmentWrite-down when carrying amount exceeds recoverable amount (IFRS) or fair value (US GAAP)
Recoverable AmountIFRS: higher of fair value less costs to sell and value in use
Value in UsePresent value of expected future cash flows from continuing use of the asset
Revaluation ModelIFRS model allowing PPE/intangibles to be carried at fair value; not permitted under US GAAP
Held for SaleAsset to be disposed of; carried at lower of carrying amount or fair value less costs to sell