The financial accounting term property, plant and equipment disclosures refer to the minimum information companies must divulge on their financial statements. Disclosure requirements fall into four categories: cost, accumulated depreciation, service lives, depreciation methods, capitalization thresholds, and restrictions.
The basis used by companies in the valuation of property, plant and equipment appearing on the asset section of the balance sheet is typically historical cost. Property, plant and equipment not being used in production, but held for investment purposes, such as land and buildings, should be categorized as such.
Depreciation is used to account for the lowering of an asset's value as its usefulness is consumed over time. The contra asset account, accumulated depreciation allows the reader of a financial statement to understand how much expense has flowed to the income statement from the balance sheet. By displaying both the historical cost of assets as well as the total accumulated depreciation, the reader of a financial statement can also understand the remaining net plant, whereby:
Net Plant = Historical Cost - Accumulated Depreciation
In addition to the above property, plant and equipment information, FASB No. 6, requires companies to disclose the following for each major class of assets: book value, estimated useful lives, the method(s) of depreciation used, and capitalization threshold(s).
Finally, companies must disclose any restrictions on the use or convertibility of these assets.
balance sheet, historical cost, depreciation expense, accumulated depreciation, contra account, property, plant, and equipment
Explore Investing Further
Trading has never been easier, thanks to the rise of online platforms that enable you to buy and sell various assets at the click of a button. But with so many options available, it can be challenging to decide which platform is right for you.
Looking for a way to avoid swap fees while trading forex?
By providing instant diversification for your portfolio, investing in ETFs can amplify the potential of any investor, novice or seasoned alike. We scoped the market to curate a list of the best ETF trading platforms available for US investors.
Our top beginner's pick for copy trading is eToro. Read on for more details, plus seven good alternatives.
Swing trading stocks can be a great way for investors to take advantage of short-term stock market movements and gain significant returns. If you're interested in swing trading, the key to success lies in selecting the right stocks to buy and sell quickly for a profit.
The table below lists the best stock picks under $2, listed on public exchanges.
The table below lists the best stock picks under $1, listed both on public and OTC exchanges.
This section will highlight the best EV-trading penny stocks available in the United States.
The demand for sustainable energy has grown rapidly in recent years. This has resulted in increased scrutiny of the automotive market. As a result, the electric vehicle (EV) industry has made significant advancements.
Intelligent Bio Solutions Inc. is a life sciences company, founded in 2016 with headquarters in New York and is engaged in performing diagnostic tests, real-time monitoring, and non-invasive surgery for its patients. The firm has developed a CoV-2 Biosensor, which can be used in RNA virus detection.
Hour Loop was founded in 2013 with headquarters in Redmond, Washington. It’s an online retailer involved in e-commerce in the United States that hit the public markets on Jan 7th of 2022. The company sells home/garden decor, electronic products, kitchenware, and apparel through walmart.com, amazon.com, and hourloop.com.
.jpg)
