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Accounting for Fixed Assets
24 Minute Accounting

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Module 1 | 24 minute Accounting | |
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Unit 1 | 24 Minute Accounting Pretest | |
Unit 2 | 24 minute Accounting Course Overview | |
Unit 3 | Accounting Department Structure | |
Unit 4 | Which Accounting System to Use? | |
Unit 5 | Accounting Concepts | |
Unit 6 | Double Entry Principle | |
Unit 7 | Accounting Cycle | |
Unit 8 | Chart of Accounts | |
Unit 9 | Recognition of Revenue | |
Unit 10 | Accounting for Inventories | |
Unit 11 | Accounting for Fixed Assets | |
Unit 12 | Income Statement | |
Unit 13 | Balance Sheet | |
Unit 14 | Auditing for your Business | |
Unit 15 | 24 minute Accounting Posttest |
Survey Questions
Hi, in this video you will learn about accounting for Fixed Assets and how it impacts both the Income Statement and Balance Sheet.
Fixed assets are assets that are purchased by an organization for long-term use that help generate income. Examples of fixed assets are land purchased for investment or use, buildings, factories, machinery and equipment.
Fixed Assets are also referred to as Non-Current Assets, as these assets will not (or should not) be converted into cash within the next 12 months.
Fixed assets appear in the financial records at their net book value, which is its original cost, minus accumulated depreciation. Because of ongoing depreciation, the net book value of an asset is always declining.
These fixed assets are shown in the financial statements in two ways:
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Historical Cost – once a fixed asset is purchased, it has to be recorded in our financial records. The purchase price paid (to the supplier) has to be added to any import duties, other taxes paid, as well as any expenses/costs paid to bringing the asset to the working condition of its intended use, such as set up and consultancy fees.
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Revalued Price – as fixed assets are utilized, the value of these assets decrease. This is what leads to the Depreciation principle. Depending on the class of asset, a specific depreciation rule will be applied.