Introduction

This chapter examines the accounting for non-current assets (hereafter NCA) – specifically property, plant and equipment. For most businesses, the objective of having NCA relates to acquiring NCA, using them productively for a certain time period and then disposing of them. This chapter examines in detail these three primary activities for property, plant and equipment (main non-current assets): (1) acquisition of NCA; (2)  depreciation of NCA over their useful lives and (3) disposal of NCA.

Chapter outline

After reading this chapter, you should be able to:

1. Describe non-current assets and how they are recorded, expensed and reported
2. Calculate and compare depreciation expense using straight-line, reducing-balance and units-of-activity methods.
3. Understand the effects of adjustments that may be made during a non-current asset’s useful life.
4. Understand and record the disposal of non-current assets.