Fixed assets are capitalized on the balance sheet and will be depreciated over the useful life.?

Question

Fixed assets are capitalized on the balance sheet and will be depreciated over the useful life. What does everyone else think of this?

Answer 1

That's how it is. An asset can be sold for money in most cases so it's not used up as an expense but usually loses value gradually until it needs to be replaced. In general it makes sense that you should expense it gradually rather than all at once.

Answer 2

They can be current assets if you have paid for them in advance (e.g. electricity prepayment)at the time of the production of the balance sheet, or liabilities if you have unpaid bills. They are never fixed assets. Fixed assets are property, vehicles, machinery, office furniture etc... They are expenses in the P and L account but on the balance sheet they are current assets or liabilities.

Answer 3

That is in accordance with US Generally Accepted Accounting Principles.

Actually the calculation would really be:

Cost minus residual value = Depreciable basis of asset

The depreciable basis is then depreciated of its estimated useful life.

Answer 4

H and R block is in business. Why would you ask a question like that here? No, you should sell short.